I-Sec maintains Add on Blue Star, lowers target price to Rs 1,800

ICICI Securities maintains Add call on Blue Star with a revised target price of Rs 1,800 (earlier Rs 1,925). The current market price of Blue Star is Rs 1587. Blue Star, incorporated in 1949, is a Mid Cap company with a market cap of Rs 32586.86 crore, operating in the Consumer Durables sector.

Blue Star’s key products/revenue segments include Air Conditioners, Income from Eng.Construction Contracts, Sale of services, Other Operating Revenue and Scrap for the year ending 31-Mar-2024.

Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 4042.95 crore, up 43.57% from last quarter Total Income of Rs 2816.09 crore and up 21.04% from last year same quarter Total Income of Rs 3340.16 crore. The company has reported net profit after tax of Rs 194.40 crore in the latest quarter.

The company’s top management includes Mr.Vir S Advani, Mr.G Murlidhar, Mr.Arvind K Singhal, Mr.Sam Balsara, Mrs.Anita Ramachandra, Mr.Anil Harish, Mr.Rajiv R Lulla, Mr.Dinesh N Vaswani, Ms.Sunaina Murthy, Mr.B Thiagarajan, Mr.Vipin Sondhi. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-03-2025, the company has a total of 21 crore shares outstanding.

Investment Rationale
ICICI Securities models Blue Star to report revenue and PAT CAGRs of 14.6% and 13.5% over FY25?27E and RoCE > cost of capital. At the DCF-based revised target price of Rs 1,800, implied P/E works out to 50x FY27E EPS (Earlier target price Rs 1,925). The brokerage maintains ADD. Key risks include steep increase in commodity prices, increase in competitive pressures and delay/failure of new products.
Promoter/FII Holdings
Promoters held 36.47 per cent stake in the company as of 31-Mar-2025, while FIIs owned 16.94 per cent, DIIs 23.1 per cent.