Add Blue Star, target price Rs 1,925: ICICI Securities

ICICI Securities has maintained an Add call on Blue Star with a revised target price of Rs 1925 (Rs 2,000 earlier). The current market price of Blue Star is Rs 1572.75. Blue Star., incorporated in 1949, is a Mid Cap company with a market cap of Rs 32273.30 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. The 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/PAT CAGRs of 18.3%/17.9% over FY25?27E, with return ratios higher than the cost of capital. The brokerage remains positive on Blue Star led by its strong competitive advantages and growth opportunities in the RAC segment. It maintains an ADD with a DCF-based revised target price of Rs 1,925 (implied target P/E 49x FY27E EPS; earlier target price Rs 2,000). Key risks are 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.