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Key Points

Star Health has reported a shocking 99.76% decline in net profits for Q4 FY25, dropping to just Rs 0.51 crore from Rs 215.14 crore in the previous quarter. The company experienced a surge in gross premium income of 35.3%, but rising expenses significantly eroded its profitability. Total expenses climbed to Rs 4,073.49 crore, marking a 5.8% increase from the previous quarter. Despite the challenging financial performance, the company's stock remained relatively stable, closing marginally up on the National Stock Exchange.

Key Points: Star Health Profits Plunge 99.76% in Challenging Q4 Earnings

  • Gross premium rises 35.3% despite massive 99.76% profit decline
  • Total expenses increase 5.8% quarter-on-quarter
  • Net profit crashes to Rs 0.51 crore from Rs 215.14 crore
  • Challenging insurance market conditions impact bottom line
2 min read

Star Health's profit crashes 99.76 pc in Q4

Star Health insurance company faces dramatic profit collapse despite revenue growth, with expenses overwhelming premium income in financial quarter.

"Sharp rise in expenses wiped out benefits of higher premium income - Financial Analysis Report"

Mumbai, April 29

Star Health and Allied Insurance Company on Tuesday reported a staggering 99.76 per cent decline in its net profit to Rs 0.51 crore for the fourth quarter of the financial year 2024-25 (Q4 FY25), as compared to Rs 215.14 crore in Q3.

The year-on-year (YoY) comparison paints an equally grim picture. The company’s net profit tumbled 99.64 per cent from Rs 142.32 crore reported in the same quarter last year (Q4 FY24).

This steep erosion in earnings has dealt a heavy blow to the company’s bottom line, both on a quarter-on-quarter (QoQ) and YoY basis.

Total expenses climbed to Rs 4,073.49 crore in the March quarter, up 5.8 per cent from Rs 3,848.66 crore in Q3 and 16.8 per cent from Rs 3,487.17 crore in a year-ago period.

The sharp rise in expenses, especially from rising claim settlements and operational costs, appears to have wiped out the benefits of higher premium income.

The fall in profit came despite an impressive surge in gross premium written -- the total amount of premium income a company earns from all policies it sells -- which rose to Rs 5,138.01 crore in Q4, up 35.3 per cent from Rs 3,796.12 crore in the previous quarter.

However, the gains in revenue were overshadowed by a rise in expenses, according to its stock exchange filing.

This disappointing quarter follows a challenging Q3 as well, where Star Health had already reported a 25.7 per cent YoY fall in net profit to Rs 215.1 crore, down from Rs 289.6 crore a year ago period.

However, the company reported a 15.4 per cent YoY rise in net earned premium to Rs 3,799.7 crore in Q3.

It witnessed a 45.8 per cent decline in EBIDTA to Rs 152.5 crore in Q3.

Shares of Star Health closed at Rs 399, up by Rs 1.10 or 0.28 per cent on the National Stock Exchange (NSE) on Tuesday.

- IANS

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Reader Comments

R
Rajesh K.
Wow, a 99% drop in profits? That's insane! I hope they can turn things around soon. Their premiums seem to be growing well, but those expenses are eating everything up. 🤔
P
Priya M.
As someone who works in insurance, this doesn't surprise me. Claim settlements have been skyrocketing across the industry. Maybe they need to re-evaluate their underwriting policies?
S
Sanjay V.
I'm a Star Health policyholder and this makes me nervous. Should I be worried about my coverage? 😟 Their service has been good so far but these numbers are concerning.
A
Ananya R.
The stock price barely moved despite this news? That's the real shocker here. The market seems to be pricing in a quick recovery, but I'm not so sure.
V
Vikram J.
While the numbers look bad, let's not forget they're still profitable. Many companies would kill for even 0.51 crore profit in tough quarters. The health insurance sector is going through a rough patch overall.
N
Neha P.
I think the management needs to be more transparent about what's causing these rising expenses. As an investor, I'd like to see a clearer path to profitability. The premium growth is impressive, but profits matter more in the long run.

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