Blue Star - Q1FY2014 Result Review - Angel Broking

Blue Star announced a decent set of numbers for 1QFY2014. Topline came in at Rs. 771cr, marginally higher than our expectation of Rs. 761cr and 5.4% higher on a yoy basis from Rs. 731cr in 1QFY2013. On the operational front, EBITDA registered 14.6% yoy growth to Rs. 38cr owing to reduced raw material cost as percentage of sales. EBITDA margin came in at 5.0% yoy as compare to 4.6% in same quarter previous year. However, bottom line grew by just 10.9% yoy to Rs. 23cr due to increased depreciation (11.5%) and decline in other income (37.5%).

Robust top line growth of 18.8% yoy in Cooling Product segment was offset by dip in revenue from EMPPACS segment by 6.7% yoy. Decline in EMPPACS segment was due to selective order booking (relatively higher margin) by the company leading to improvement in EBIT margin by 252bps yoy to 5.9% for the division. EBIT margin for Cooling Product segment contracted slightly by 58bps to 10.7% yoy in 1QFY2014. We maintain our Buy recommendation on the stock with a revised target price of Rs. 215 based on a target EV/sales of 0.7x for FY2015E.

Source : Equity Bulls

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