Broker's call: Blue Star (Buy)

| Updated on November 25, 2019

Reliance Securities

Blue Star (Buy)

CMP: ₹816.35

Target: ₹941

Blue Star Limited is an air-conditioning and commercial refrigeration company. The company conducts various activities, such as electrical, plumbing and fire-fighting services.

Blue Star has emerged as a leading player in room AC market with market share of about 12.5 per cent.

The company is looking newer products category and recently entered into water purifier, air purifier and air cooler markets.

Blue Star has reported a strong performance in 2QFY20 with its adjusted PAT growing by 78 per cent y-o-y to ₹39.6 crore led by a healthy 21 per cent y-o-y growth in revenue to ₹1,250 crore, higher other income and lower interest.

With 11 per cent y-o-y growth in order inflow to ₹790 crore during the quarter, Blue Star’s order book rose by 33 per cent y-o-y to ₹2,940 crore as of 2QFY20-end.

We continue to remain positive on Blue Star on the back of improving margin profile, healthy balance sheet and healthy market share. We have ‘buy’ recommendation on the stock with a target price of ₹941.

Published on November 25, 2019

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