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MOSL: BLUE STAR (Neutral)- Results above estimates on strong UCP performance

Blue Star: Results above estimates on strong UCP performance

(BLSTR IN, Mkt Cap USD0.9b, CMP INR732, TP INR780, 5% Upside, Neutral)

 

  • 3QFY18 results beat estimates at operating level. Sales grew 7% YoY to INR9.8b, in line with our estimate of INR9.97b. EBITDA grew 39% YoY to INR540m, ahead of our estimate of INR460m, driven by strong growth in the UCP segment (28% LTL growth). Adjusted net profit increased 30% YoY to INR188m, below our estimate of INR200m, on losses in JVs (INR21m) and lower other income.
  • UCP segment reported LTL revenue growth of 28% YoY (15% YoY on reported basis) to INR3.7b, higher than our estimate of INR3.2b. Room air conditioner segment sales grew 25% YoY on channel restocking prior to the implementation of the new energy rating norms effective January 2018. EBIT margin expanded 420bp YoY to 7.4%, driven by higher volumes, price hikes taken to offset higher RM cost, and higher realizations. The management has guided 9-9.5% margin, excluding the 100-120bp impact from water purifiers.
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.

Provider
Motilal Oswal
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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