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Antique Stock
Blue Star (Buy)
CMP: ₹388.90
Target: ₹465
Bluestar is one of the pioneers in the domestic HVAC (heating,ventilation and airconditioning) and room AC business in the domestic space. The company’s integrated business model of a manufacturer, contractor and after-sales service provider enables it to offer an end-to-end solution to its customers, which has proved to be a significant differentiator in the market place.
Having successfully established itself in the retail room AC market, which the company had entered in FY11, Blue Star plans to increase its foot print in the North Indian market. They have recently launched their completely indigenised VRF and plan to improve market share under this category. Invertors and higher rated (3 Star/5 Star) splits will be the focus of the company and they position themselves as energy efficient, better technology product company. Margins will normalise post ₹25-30 crore legacy project impact. We believe that focus on high technology, in-house manufacturing and introduction of new products along with recovery in the domestic project landscape will fuel growth.
We value Blue Star based on the mean one-year forward multiple during previous three years.
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