Accumulate Blue Star; target of Rs 763: Yes Securities

Yes Securities' research report onBlue Star

BSL posted an 18.5% rise in 4QFY17 consolidated net sales to INR 13.8bn supported by a 20%/18% growth in Unitary Products (UP)/ Electro Mechanical Projects (EMP) sales. Professional Electronics & Industrials Systems (PEIS) sales rose 8% to INR 568mn. EBIT margins in UP/EMP/PEIS were stable at/rose 185bps to/rose 529bps to 10.5%/4.8%/19.4%.

Outlook

We are positive on the ways BSL is adding new categories and derisking its current business model. At CMP of INR 665, BSL trades at 32x FY19E Consol. EPS. Upgrade to ACCUMULATE rating with a TP of INR 763.

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