Blue Star - Q4FY2013 Result Review - Angel Broking

Blue Star announced a mixed set of numbers for 4QFY2013. Topline came in at Rs. 858cr, 2.2% higher than our expectation of Rs. 840cr and 5.5% higher on a yoy basis from Rs. 814cr in 4QFY2012. However, EBITDA margin came at 2.3%, 282bp lower than our expectation of 5.1% and 193bp lower on a qoq basis. This was primarily due to lower margin in the EMPPACS division during the quarter. This decline in EBITDA was offset by an unexceptionally high other income, thus leading to a net profit of Rs. 19cr as compared to a loss of Rs. 45cr in 4QFY2013.

For the full year FY2013, revenue grew by 3.7% yoy to Rs. 2924cr, while the EBITDA rebounded to a positive territory at Rs. 90cr during the year as compared to a loss of Rs. 23cr in FY2012 on account of improvement in margin in EMPPACS division. Moreover, lower interest cost and higher other income in FY2013 accelerated the net profit to Rs. 39cr from a loss of Rs. 105cr in FY2012.

During the year, Blue Star Design and Engineering Ltd (BSDEL), a JV of the company, and synergy realtors and Services Pvt Ltd (SRSPL) filed a scheme of amalgamation of companies with a swap ratio of 180 fully paid up preference shares of Rs. 100 each of BSDEL for every 1 fully paid up equity share of Rs. 10 each of SRSPL. Upon the Scheme becoming effective, BSDEL would become a wholly owned subsidiary of the company.

As we rollover to FY2015, we maintain our Buy on the stock with target price of Rs. 224 based on a target EV/sales of 0.7x for FY2015E.

Source : Equity Bulls

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