Buy Blue Star; target of Rs 1490: Sharekhan

Sharekhan's research report on Blue Star

PAT increased 56% y-o-y to Rs. 100 crore, supported by strong revenue growth of 25% y-o-y, margin improvement of 75bps, higher other income, and lower interest expense. EMP/ unitary products/professional electronics and industrial systems segments posted robust growth of 18%/36%/20% y-o-y. Despite subdued rainfall, the company continued to witness strong demand from Tier 3, 4, 5 markets. Management believes India is going to be the fastest-growing market for RAC and expects to improve its market share in FY2025.

Outlook

We maintain Buy with a revised PT of Rs. 1,490, rolling forward our valuation multiple to FY2026E earnings and increasing our valuation multiple to factor in strong earnings growth trajectory over the next 2-3 years.

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