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Research
Views on Blue Star Ltd 2QFY2016 Results: Angel Broking
Posted On : 2015-10-26 19:42:48( TIMEZONE : IST )
Views of Mr. Milan Desai (Research Analyst - Mid Caps, Angel Broking) on Blue Star Ltd 2QFY2016 Results:
2QFY2016 numbers broadly in-line with estimates
"For 2QFY2016, Blue Star reported numbers that were broadly in line with our estimates. The standalone top-line for the quarter reported an impressive 12.3% yoy increase to INR 717cr. This is in-line with our estimate of INR 714cr. The Electro Mechanical Projects and Packaged Air-conditioning Systems (EMPPAC) business revenue grew by 14.8% yoy to INR 459cr, the Cooling Products business revenue grew by an impressive 19.1% yoy to INR 246 and PEIS business revenue de-grew by 66.0% yoy to INR 12cr. On operating front, the EBITDA margin expanded by 54bp yoy to 3.8% vis-Ã -vis our estimate of 3.3%. The raw material cost as a percentage of sales increased by 136bp yoy to 70.2% but this was made up by 109bp yoy and 81bp yoy decline in Employee and Other expenses to 8.9% and 17.1%, respectively. The EBIT margins for EMPPAC, Cooling Products and PEIS were 5.7%, 5.7% and 17.2% respectively. On account of lower other income and adjusting for exceptional expenses arising from VRS related expenses of INR 16cr, the net profit de-grew by 24.3% yoy to INR 7cr, against our estimate of INR 4cr.
Going ahead, we expect Blue Star to maintain its performance on the back of improving conditions for the EMPPAC business and superior performance from the Cooling Products business. The company has significantly increased its distribution network to 2,250 dealers as compared to 1,950 dealers during the same period in the previous year which helped in enhancing revenue of the Cooling Products business. We are positive on Blue Star and maintain our ACCUMULATE rating on the stock".
Shares of BLUE STAR LTD. was last trading in BSE at Rs.360.9 as compared to the previous close of Rs. 353.7. The total number of shares traded during the day was 12076 in over 727 trades.
The stock hit an intraday high of Rs. 362.25 and intraday low of 351.5. The net turnover during the day was Rs. 4337231.