Blue Star Limited Research Tear Sheet Q3 FY 2022

Blue Star Limited is an Indian multinational company. It mainly deals with electronic products like refrigerator, air conditioner, Air Coolers, Washing machines , Cold storage, Microwaves Air purifiers and Water dispensers. It was incorporated in 1943. The Founder is Mohan T Advani. The company has its headquarter in Mumbai, Maharashtra, India. The company has its operation Worldwide. Blue Star has 4 plants located in Dadra, Kala Amb, Wada, and Ahmedabad.  The company has marked its presence in 18 counties, like in the Middle East, Africa, SAARC and ASEAN regions. It has subsidiaries in UAE, Qatar.

Key Financial Highlights

` Rs in Crores	31.12.21	31.12.20
Total Income from Operations	1,519.60	1,131.98
Net Profit/(Loss) for the period	70.32	49.73
Earnings Per Share (EPS)	4.94	3.82

Revenue from Operations increased by 34.0% to Rs 1506.22 crores.

Net Profit for the quarter increased by 29.4% to Rs 47.57 crores.

The Tax expense for the quarter increased from 12.96 crores to Rs 22.75 crores.

Earnings per share increased from Rs 3.82 in Q3FY21.to Rs 4.94 in Q3 FY 2022.

Finance Cost for Q3 FY 2022 decreased to Rs 11.56 crores from Rs 14.92 crores.

Debt- In Q3 FY 2022 the Net borrowing has increased to Rs 165.11. The debt equity ratio is 0.16. The debt/borrowing has increased due to the investment in the new project at Sri City and Wada.

Segment I -Electro-Mechanical Projects & Commercial Air Conditioning Systems

The Segment I revenue increased by 41.7% to Rs 829.85 crores. The segment result is (6.3% of revenue) and order inflow improved by 34.0% to Rs 852.82 crores.

Electro-Mechanical Projects business- Electro-Mechanical Projects business increased by 4.2% to Rs 2311 crores. Order inflows mainly come from infrastructure sector, including MEP projects.

 Commercial Air Conditioning Systems- Orders bagged mainly from Avenue Supermarkets Ltd. (Pan India), BSR Builders LLP (Secunderabad), Olympia Cyber Space Pvt. Ltd. (Chennai) and JSW Steel Ltd. (Bellary).

International Business– For the international business, the Middle East has marked improvement. Products have even entered successfully in the Tanzania market. The business in the Qatar region continued well,  but the business in Malaysia is impacted due to COVID-19.

Segment-II Unitary Products:

The business in this region improved by 23.7% to Rs 609.68 crores. There is a drop in the segment margins driven by a rise in input costs, disruptions in the international supply chain, increased supply lead time.

Cooling and Purification Products business encountered at 28% growth in revenue. This segment ended the quarter with a robust market share of 13.25%.

Commercial Refrigeration business- The demand mainly came from pharma, healthcare, e-commerce and food & beverages sectors. Bluestar has maintained its  leadership position in Deep Freezers, Storage Water Coolers and Modular Cold Rooms.

Segment III: Professional Electronics and Industrial Systems

Revenue in this segment improved by 46.8% to Rs 66.69 crores. Orders were bagged  mainly from JSW Steel Limited, ICICI Bank Limited, FIS Payment Solutions & Services and Reliance Industries Limited.

Conference Call Highlights

Management Updates

Market growth for the quarter is 25%.

Chief financial officer Neeraj Basur of Blue Star resigned.

Wada have added about Rs.100 cr, there’s also the routine CAPEX in the other plants.

New investment will be under PLI,  that will that unit has  this lower tax rate.