Daijiworld Media Network - Mumbai
Mumbai, Apr 29: Star Health and Allied Insurance Company today reported a dramatic 99.76 per cent fall in its net profit to a mere Rs 0.51 crore for the fourth quarter of the financial year 2024-25 (Q4 FY25). This is a stark contrast to the Rs 215.14 crore profit recorded in the preceding third quarter (Q3).
The year-on-year (YoY) comparison paints a similarly bleak picture, with the company's net profit collapsing by 99.64 per cent from Rs 142.32 crore reported in the corresponding quarter of the previous year (Q4 FY24).
This significant erosion in earnings has severely impacted the insurer's profitability, both on a quarter-on-quarter (QoQ) and YoY basis.
The company's total expenses surged to Rs 4,073.49 crore in the March quarter, marking a 5.8 per cent increase from Rs 3,848.66 crore in Q3 and a substantial 16.8 per cent rise from Rs 3,487.17 crore in the same period last year. The sharp increase in expenses, particularly driven by higher claim settlements and operational costs, appears to have negated the benefits of increased premium income.
This substantial profit decline occurred despite an impressive 35.3 per cent surge in gross premium written – the total premium income earned from all policies sold – which reached Rs 5,138.01 crore in Q4, up from Rs 3,796.12 crore in the previous quarter. However, according to the company's stock exchange filing, these revenue gains were overshadowed by the escalating expenses.
This disappointing Q4 performance follows a challenging Q3, where Star Health had already reported a 25.7 per cent YoY decrease in net profit to Rs 215.1 crore, down from Rs 289.6 crore in the year-ago period. Despite this, the company had reported a 15.4 per cent YoY increase in net earned premium to Rs 3,799.7 crore in Q3. It also witnessed a 45.8 per cent decline in EBIDTA to Rs 152.5 crore in the third quarter.
On Tuesday, shares of Star Health closed at Rs 399 on the National Stock Exchange (NSE), registering a marginal gain of Rs 1.10 or 0.28 per cent.