Management meet update - Hold Blue Star

Blue Star
Reco: HOLD
CMP: Rs159
Target Price: Rs185

A ray of light; Retain Hold

- Blue Star (BLSR) outlines measures to improve profitability and balance sheet strength – addresses twin primary investor concerns

- But measures to result in erosion of FY12E profits. We cut earnings estimates by 93% to Re0.6 per share – attributed to completion of projects incurring cost over-runs

- Retain FY13E earnings estimates of Rs15.0 per share – upsides exist from de-leveraging of balance sheet (not factored in our estimates)

- Valuations attractive at 12.7X FY13E earnings. Retain Hold rating. BLSR's ability to deliver improved performance will act as upgrade catalyst.

Source : Equity Bulls

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