Buy Blue Star; target of Rs 1465: Sharekhan

Sharekhan's research report on Blue Star

Blue Star Limited’s (Blue Star) Q3FY2023 performance was driven by strong sales performance across EMPS, UCP and professional electronics segments. OPM was broadly-in line and net profit exceeded estimates due to lower depreciation cost. The company expects strong order momentum to continue in EMPS segment. RAC sales are expected to grow well in the upcoming summer season and the company would maintain its market share of 13.25%. The commencement of Sri city plant would help augment UCP sales and also aid in margin improvement. Further, capex cycle is on upswing and consumer sentiments are improving which bodes well for overall growth and profitability. We envisage ~21%/~36% revenue/PAT CAGR of FY2022-2025E.

Outlook

We maintain a Buy rating on Blue Star with a revised PT of Rs. 1,465, given strong performance in 9MFY2023, healthy market share and promising outlook across its business segments.

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