Blue Star Q4 Results Review - Continues To Positively Surprise Us: Nirmal Bang

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Nirmal Bang Report

Both Blue Star Ltd.'s topline and Ebitda margin were above our estimates by 8% and 41 basis points respectively, due to higher-than-anticipated growth in room AC.

Blue Star improved its RAC market share by 25 bps in FY24 to 13.75%, with RAC volume at 1 million plus units. While there was no price hike in Q4 FY24 and year-to-date Q1 FY25 (and no massive price disruption as well), strong volume growth is expected in Q1 FY25 too, on the back of strong summers.

While total order booking de-grew by ~2% YoY in FY24, upward traction in manufacturing and data centre + pick up in infra cycle are expected to pump up order book growth in FY25. Currently, the company is focused on expediting the speed of execution of its order book and collection of dues.

We draw high comfort in its business model due to its strategy of chasing profitability and free cash flow, presence in high growth Comm. Refrigeration and high quality order booking from EMPS.

While we remain structurally positive on long term prospects, the stock has had a good price run-up in recent months (~55%+ Yyear-to-date CY24).

As a result, we believe that the share is currently fairly priced, and therefore, maintain Accumulate with SOTP based target price of Rs 1,435 (42 times blended PE on FY26E earnings pers share). Nonetheless, we believe it is a long term compounder, and therefore, it should be accumulated at every dip.

Click on the attachment to read the full report:

Nirmal Bang Blue-Star--Q4FY24-Result-Update.pdf

Read Document

Also Read: Blue Star Q4 Results: Revenue Rises 26.8%, In Line With Estimates

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.