Blue Star Q4 Review: ICICI Securities Maintains 'Add' On Healthy Results, But Cuts Target Price — Here's Why

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ICICI Securities Report

Blue Star Ltd. reported healthy Q4 FY25 with strong revenue growth in EMP projects and unitary cooling products. We note the strong order book from data centers, factories, hospitality, education and healthcare segments helped report 30.6% YoY revenue growth in EMP projects YoY.

While room AC segment also did well, we note it was partially led by trade inventory up-stocking at end-Mar’25. Unseasonal rains in Apr’25 may impact primary sales in Q1 FY26. Professional electronics (highest margin segment) continues to disappoint with revenues declining in med-tech and data security.

We believe the higher trade inventory at end-FY25 may probe Bluestar to raise trade discounts and could impact margins slightly in H1 FY26.

While we remain positive on Bluestar due to its healthy growth potential in the RAC industry and established competitive advantages, near-term (Q1 FY26) performance shall be challenging. We trim FY26E earnings by 2.7%. Maintain Add with a DCF-based revised target price of Rs 1,925.

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