Blue Star Ltd - One Stride Forward, Maintain Hold - Emkay

Reco: HOLD
CMP: Rs199
Target Price: Rs185

- Net profit below estimates at Rs73 mn due to 4% yoy decline in revenues to Rs5.8 bn and lower EBITDA margins at 3.5%. But EMP&PAC segment delivers with robust 7% EBIT margins

- But BLSR fails to reduce debt - Rises 23% from Rs3.4 bn in Mar'12 to Rs4.2 in Sep'12. Improvement in profitability and reduction of debt remains key trigger for re-rating

- Healthy order inflows at Rs6.2 bn. Order book down 9% qoq to Rs16.8 bn - due to removal of Rs2 bn slow moving orders. Expect order inflows to improve in H2FY13E

- Fine tune earnings by -8%/-4% for FY13E/FY14E respectively. Taken one stride forward in the quarter. Retain Hold with target of Rs185

Source : Equity Bulls

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