- Nirmal Bang reiterates Buy rating on Blue Star with a target price of Rs 2,025
- The target price implies a blended P/E multiple of 48x on March 2028 earnings
- Blue Star sees 25–30% growth in tertiary demand versus 15% in primary sales
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Nirmal Bang Report
Blue Star Ltd.'s shares are likely to be in focus after Nirmal Bang reiterated its ‘Buy' rating on the stock, citing strong fundamentals and long-term growth visibility.
The brokerage has set the target price to Rs 2,025 on a sum-of-the-parts basis, reflecting confidence in the company's earnings trajectory and business outlook.
According to Nirmal Bang, the current valuation implies a blended P/E multiple of 48x on March 2028 estimated earnings, which is largely in line with its five-year historical average. The brokerage believes this valuation appropriately captures the company's structural strengths and growth prospects.
Outlook Remains Strong
Looking ahead, Blue Star continues to witness strong consumer demand with tertiary demand growing at 25–30% versus primary sales growth of around 15%, leading to a gradual normalisation of channel inventories.
Dealers remain cautious on stocking amid weather and pricing uncertainties. The company is also facing margin pressure, as commodity costs have risen 12–14% while price hikes have been limited to 8–10%, creating a 3–4% margin gap.
Following the transition to new BEE star-rating norms, dealers are now purchasing only updated products.
Management added that compressor availability remains comfortable through a diversified sourcing strategy, although domestic compressors currently cost 5–7% more than Chinese imports.
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