Blue Star Ltd - Turning corner, Retain Hold - Emkay

Reco: HOLD
CMP: Rs 190
Target Price: Rs 185

* Strong performance - (1) 4% yoy revenue growth to Rs7.3 bn (2) 70 bps yoy expansion in EBITDA margins (3) Net profit at Rs205 mn - sharply ahead estimates.

* EMP & PAC segment turns around with EBIT profit at Rs124 mn (no one-offs). Cooling products posts 2% yoy revenue growth (disappoints) and 11.3% EBIT margins (ahead est).

* Debt rises marginally on qoq basis to Rs3.8 bn, stalls stock re-rating. Await all-round delivery by BLSR to upgrade the stock.

* Cut earnings estimates by 3% and 19%. Positive catalysts are gaining prominence - will review in subsequent quarters. Retain Hold with target of Rs185.

Source : Equity Bulls

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