Sharekhan's research report on Blue Star
Q1FY25 revenues grew by 28.7% to Rs 2,865 crore in line with our estimate of Rs 2,895 crore. Unitary products segment (room ACs and commercial refrigeration) grew by 44% to Rs 1,729 crore on increased demand due to soaring temperatures and a harsh summer. EMP sales grew by 9% to Rs 1039 crore. Operating profits rose by 64% to Rs 237.8 crore leading driving up margins by 178.9 bps. Adjusted PAT grew by 102% led by higher other income and a lower tax outgo. Export sales are expected to increase gradually and Blue Star guided for a growth of only 7-8% in FY25.
Outlook
Stock currently trades at 51x/38x to FY25/FY26 EPS respectively. We downgrade our rating to Hold with a PT of Rs. 1,772 given the premium valuations.
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