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In the consumer durables industry, Blue Star Ltd. is a mid-cap company with a market cap of Rs. 9,679.55 crore. India’s leading commercial refrigeration and air conditioning firm, Blue Star, has 7500 outlets for room air conditioners, packaged air conditioners, chillers, cold rooms, and refrigeration products and systems. It also has 1172 service representatives who serve clients in more than 900 locations. Along with the air purifier and air cooler sectors, Blue Star is also engaged in the business of the domestic water purifier market with a fashionable and distinctive line that includes the country’s first RO+UV Hot & Cold water purifier.
Blue Star share price history
Blue Star Ltd. shares closed at Rs. 1,005.05 per share today, up 1.42 per cent from the previous close of Rs. 990.95. An investment of ₹1 lakh placed in this stock 21 years ago would have now grown to ₹1.39 Cr. The stock price has gone up from ₹7.21 as of July 6, 2001 to the present price level, logging a multibagger return and an all-time of 13,839.67 per cent. The stock has gained by 49.38 per cent over the past five years and by 20.19 per cent over the past year. The stock has dropped 2.35 per cent during the past six months and 1.01 per cent year-to-date so far in 2022. In the last 1 month, the stock has gained 4.71% and it has gained 3.47% in the last 5 trading days. On the NSE, the stock had touched a 52-week-high of ₹1,225.00 on 21-April-2022 and a 52-week-low of ₹758.00 on 30-August-2021 indicating that at the current price level the stock is trading 17.95% below the 52-week-high and 32.59% above the 52-week-low.
Blue Star Ltd Q1FY23 results
The brokerage firm Sharekhan has said in a note that “Blue Star’s Q1FY23 consolidated revenues were in-line with our estimates, while net profit exceeded our expectations helped by higher other income and lower tax rate. Revenues came in at ₹1,970crore (up 87% y-o-y). Operating profit grew by 192% y-o-y to ₹123 crore in line with our estimates. While gross margin dropped by 330 BPS y-o-y to 21.1% due to high raw material costs. Tight control of employees and other costs resulted in an operating margin at 6.3% (up 224 bps y-o-y). Apart from strong operating profit, higher other income and lower tax also helped in the net profit growing more than 5x to ~ ₹74crore. EMPS segment recorded revenue growth of 57% y-o-y contributing 40% to total sales, while Unitary products which include room ACs recorded growth of 122.5%, contributing 57% to total sales. Notably, the growth in the AC business was 24% higher as compared to Q1FY20 which was the normal quarter before the pandemic. Profitability in EMPS segment improved as it reported a PBIT margin of 5.7% (4% in Q1FY22), while Unitary products’ EBIT margin jumped to 8.1% (vs 4.3% in Q1FY22).”
Should you buy the shares of Blue Star?
The research analysts of the broking firm Sharekhan has said that “Blue Star is expected to outperform the industry as well as its peers drove by a strengthening distribution network, rising market share, and improving product mix. Besides, scale-up in commercial refrigeration products, backward integration, increase in inhouse manufacturing would also aid growth. Similarly, the EMPS segment’s growth prospects are brighter given the strong order book and continued traction in order inflows in both domestic and international markets. We expect revenue/PAT to clock a CAGR of ~20%/39% over FY22-24E. At CMP, the stock trades at ~29xFY24E EPS. We maintain our Buy rating on the stock with an unchanged PT of Rs. 1,250.”
It will be a new high for the stock if the brokerage’s price target is achieved by the stock. The stock is trading above the exponential moving average (EMA) of 5 days, 10 days, 20 days, 50 days, 100 days, and 200 days at the current market price of Rs. 1,005.05.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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