Is Star Health Insu overvalued or undervalued?

Oct 11 2025 08:11 AM IST
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As of October 10, 2025, Star Health Insurance is considered overvalued with a PE ratio of 47.75 and a valuation grade shift from fair to expensive, despite short-term outperformance against the Sensex, due to its significantly higher ratios compared to peers and lack of growth expectations.
As of 10 October 2025, the valuation grade for Star Health Insurance has moved from fair to expensive, indicating a shift in its market perception. The company is currently considered overvalued, with a PE ratio of 47.75, a price to book value of 3.99, and an EV to EBIT of 12.35. These ratios suggest that the stock is trading at a significant premium compared to its earnings and book value.

In comparison to its peers, Star Health Insurance's PE ratio is notably higher than Bajaj Finance at 36.56 and Life Insurance at 11.65, which are both in the same industry. Additionally, the PEG ratio for Star Health is 0.00, indicating no growth expectations priced into the stock, contrasting sharply with Bajaj Finserv's PEG of 2.39. While Star Health has outperformed the Sensex in the short term with a 1-week return of 4.83% compared to the Sensex's 1.59%, its long-term performance has been lackluster, with a 1-year return of -15.51% against the Sensex's 1.09%. This further reinforces the view that Star Health Insurance is overvalued in the current market.
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