Blue Star Ltd., incorporated in the year 1949, is a Mid Cap company (having a market cap of Rs 9775.38 Crore) operating in Consumer Durables sector.
Blue Star Ltd. key Products/Revenue Segments include Air Conditioners, Income from Eng.Construction Contracts, Sale of services and Other Operating Revenue for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 1247.86 Crore, up 17.72 % from last quarter Total Income of Rs 1059.99 Crore and up 37.43 % from last year same quarter Total Income of Rs 907.98 Crore. Company reported net profit after tax of Rs 31.22 Crore in latest quarter.
Investment Rationale
Blue Star delivered revenue growth of 37% YoY to Rs12.4bn in Q2FY22 led by revival of business in all segments. Growth in room AC (RAC) segment was in line with industry growth of 35% YoY and the company’s pan-India market share remained intact at 13%. Unitary cooling segment margins expanded 140bps due to 12-14% price hikes taken since Jan’21. However, overall margins remained impacted as operational costs increased driven by business momentum. Blue Star has commenced construction of a greenfield facility for room ACs in Sri City. Given the healthy pace of execution in projects business supported by pick-up in orders, the brokerage upgrades earnings estimates by 4.6% and 11% for FY22E and FY23E respectively. Owing to rich valuations, the brokerage maintains REDUCE with a revised target price of Rs861 (previously: Rs765).
Promoter/FII Holdings
Promoters held 38.76 per cent stake in the company as of 30-Sep-2021, while FIIs owned 10.72 per cent, DIIs 22.69 per cent.
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