Blue Star - Q1 FY22 Result Report - YES Securities

(Rating: REDUCE, TP: Rs900, Upside: 4.8%)

- Blue star (BLSTR) delivered revenue growth of 68% yoy with Unitary products and EMPS and packaged air-conditioner segments registering growth of 84% and 62% respectively. Gross margin has expanded 95bps on better product mix.

- Commercial air-conditioning registered 108% growth on lower base, while RAC, the key segment registered growth of 58%, marginally higher than market growth of 55%. Commercial refrigeration has been witnessing good traction from Pharma and Healthcare segments.

- Company has affected 8% cumulative price increase to offset commodity inflation. However entire benefit of price increase will be visible only from Q3 as higher discounts are being offered to clear the inventory.

- BLSTR has largely grown in line with the market maintaining its market share in RAC at 13%. BLSTR continues to be leader in ducted AC, second in VRF and in top three in chillers.

- We now pencil in Revenue/EBITDA/PAT CAGR of 18%/29%/49% over FY21-24E. We roll forward our valuations multiple to FY24E with our SoTP-based PT of Rs900 assigning 40x to unitary products and maintain REDUCE rating on relatively high valuations

Shares of Blue Star Ltd was last trading in BSE at Rs. 859 as compared to the previous close of Rs. 841.2. The total number of shares traded during the day was 14604 in over 1859 trades.

The stock hit an intraday high of Rs. 871.75 and intraday low of 828.45. The net turnover during the day was Rs. 12397878.

Source : Equity Bulls

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