MOSL: BLUE STAR (Neutral)-Results below estimates, UCP segment disappoints
​blue star: Results below estimates, UCP segment disappoints
(BLSTR IN, Mkt Cap USD1.0b, CMP INR650, TP INR665, 2% Downside, Neutral)
- 4QFY17 performance below expectations: Revenue increased by 18% YoY to INR13.8b (est. of INR14.5b) and EBIDTA by 2% YoY to INR0.8b (est. of INR0.9b). Adj. net profit fell 6.5% YoY to INR372m (est. of INR547m).
- UCP segment’s revenue rose 20% YoY to INR6.5b, below our estimate of INR7.8b, led by sluggish secondary sales due to continued impact of demonetization in Jan-17 and weak summer in south India. EBIT margin shrunk to 10.5% from 10.7% in the year-ago period. BLSTR’s market share in the Room AC segment expanded 100bp to 11.5% in FY17, which the company intends to grow by 100bp annually. In the Water Purifier segment, BLSTR established 135 channel distributors in 80 towns, with a target to reach 100 towns in FY18. In FY17, the company incurred INR0.3b on brand building exercise for the Water and Air Purifier segments.
- EMP segment’s revenue grew 18% YoY to INR6.8b, led by improved pace of execution of projects in hand. Traction was witnessed in the Buildings (IT, ITES, hotels and hospitality) and Infrastructure (power, metro, healthcare) segments. EBIT margin expanded to 4.8% from 3.1% in 4QFY16.
Blue Star is an air-conditioning and commercial refrigeration company. Co. is engaged in the provision of cooling solutions as well as import distribution and maintenance of professional electronic and industrial equipment and systems, including turnkey engineered solutions in the areas of banking, telecom, healthcare, defense, pharmaceuticals, manufacturing and research and development. Co.'s business segments are Central Air-conditioning Systems, Cooling Products and Professional Electronics and Industrial Equipment.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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