Blue Star Q2 Results Review - Healthy Performance Of EMP Projects, RAC Amid A Lean Quarter: ICICI Securities

ICICI Securities Report

Takeaways from Blue Star Ltd.'s Q2 FY25 results -

1. Electro-mechanical projects business reported strong revenue growth (+32.6% YoY) led by broadbased demand across sub-segments. Segmental margin expanded 229 bps YoY led by benefits of better product mix and operating leverage. Strong performance of EMP business largely offset the impact of flat/weak performance in unitary products and professional electronics businesses.

2. Room AC segment reported healthy revenue growth amid a lean business period in the unitary products business. However, the commercial refrigeration business was impacted due to a change in compliance norms and delay in capacity ramp-up.

3. Strong order inflow (in our view) led to expansion of order book to Rs 66 billion (+9.8% YoY).

4. Gross margin, at 26.5%, scaled past the pre-covid band of 23-25% led by benefits of change in revenue mix and cost optimisation.

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