Blue Star reported better than expected performance with strong revenue growth across business verticals, OPM was also ahead of expectations despite gross margin pressures. Net profit came in-line with estimates. Expect growth momentum to continue in Q1FY23 given strong room air conditioner (RAC) sales in April. The company expects 25-30% growth vs 20-25% expected for RAC industry in FY2023 through market share gains. The management expects margin to improve in FY23 given better inventory management, cost control initiatives and higher sales volumes.
OutlookWe maintain a Buy rating on Blue Star Limited (Blue Star) with revised PT of Rs. 1,250, given strong performance in Q4 and FY22 and robust outlook across segments going forward.
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