Reduce Blue Star; target of Rs 510: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital's research report on Blue Star

Q1 was a hard quarter for Blue Star with revenues down 60% yoy, driven by a dip of 70% in the unitary cooling business at Rs2.7bn which was impacted by lost summer season. The project business was down 50%, impacted due to sites not operating at full capacity which has led to a loss, with EBIT level losses in both the segments (Refer Exhibit 6). Both the businesses are showing improvement as the economy opens up hand is expected to normalize by Q4FY21, which is the next big quarter for the RAC industry.

Outlook

We trim estimates to factor in the Q1 numbers (Exhibit 2) and expect them to reach FY19 levels again by FY22. We retain our Reduce, with a TP of Rs510 valuing stock at a PER of 24x for FY22E.

For all recommendations report, click here

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