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PL Capital Report
Domestic brokerage firm PL Capital initiates coverage on Blue Star Ltd. with ‘Buy' rating and SoTP-based target price of Rs 1,873, implying 44 times FY28E P/E, given its strong earnings visibility, improving profitability and leadership across the heating, ventilation and air conditioning (HVAC) industry.
The brokerage highlighted that Blue Star is one of India's leading air conditioning and commercial refrigeration companies, with a diversified presence across room air conditioners, commercial air conditioners, electro-mechanical projects, commercial refrigeration and industrial solutions.
The company is well positioned to capitalize on India's structural cooling demand, supported by
- rising RAC penetration and market share gains;
- leadership in CAC and EMP;
- timely expansion of manufacturing capacity through the Sri City facility; and
- emerging opportunities from data center expansion and infrastructure development.
The brokerage expects revenue/Ebitda/PAT to grow at 18.9%/22.9%/24.9% CAGR over FY26-28E, driven by sustained demand across both the unitary cooling products and EMP businesses, higher capacity utilisation and operating leverage.
Hence PL Capital initiate coverageg with ‘Buy'.
Key risk to to call are seasonality risk, sourcing risk, competitive rist and regulatory and compliance risk.
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