Motilal Oswal - Blue Star Ltd. (BLUESTARCO) MOSL: BLUE STAR (Neutral)-A cool start to the summer season! Aims to increase market share to 13.5%

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Motilal Oswal

EUR 120.00 For Business Accounts Only

MOSL: BLUE STAR (Neutral)-A cool start to the summer season! Aims to increase market share to 13.5%

Blue star: A cool start to the summer season! Aims to increase market share to 13.5%

(BLSTR IN, Mkt Cap USD1b, CMP INR751, TP INR770, 3% Upside, Neutral)

We met Mr B. Thiagarajan, Joint Managing Director at Blue Star (BLSTR). Key takeways:

UCP segment: Targets to achieve market share of 13.5%, margins of 9-9.5%

Market to grow at 10-15% in FY20: The summer season has started well, with April primary sales growth of 15% and secondary sales growth of 20%. BLSTR expects RAC industry growth of 20-25% YoY for the entire summer season, leading to growth of 10-15% for FY20. The company expects to grow at 15-20% in this fiscal year.
Aims to capture 13.5% UCP market share in FY20: The company aims to expand its market share by 120bp to 13.5% in FY20 by capturing an additional pie of the market in the northern region, where it enjoys a 9% market share.
BLSTR has taken multiple initiatives in the north like (a) venturing into the window AC market, (b) price rationalization actions to be more competitive and (c) increasing ad spend. The company has also shifted its sales and marketing office to Delhi to be near to the market.
Preferring margins over market share: Management has a clear focus to retain and grow margins in the UCP segment rather than chasing market share. It would not compromise on margins for pushing up market share, and expects UCP margins to be at 9-9.5% in FY20.

13/05/2019 1 EN

Underlying

Blue Star Ltd.

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.

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INE472A01039 National Stock Exchange of India India

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Motilal Oswal

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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MOSL: BLUE STAR (Neutral)-A cool start to the summer season! Aims to increase market share to 13.5%

BLUE STAR is slightly downgraded to Slightly Positive due to an increasingly adverse environment

MOSL: BLUE STAR (Sell)-Weak operating performance; UCP disappoints

Blue Star's Q3FY20 results (Neutral) - Weak quarter

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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