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Dolat Capital Report
Q1 was a hard quarter for Blue Star Ltd. with revenues down 60% YoY, driven by a dip of 70% in the unitary cooling business at Rs 2.7 billion which was impacted by lost summer season.
The project business was down 50%, impacted due to sites not operating at full capacity which has led to a loss, with Ebit level losses in both the segments.
Both the businesses are showing improvement as the economy opens up hand is expected to normalize by Q4 FY21, which is the next big quarter for the refrigeration and air conditioning industry.
Inventory levels were higher by 30 days than usual levels but this is not alarming and Blue star expects inventory is expected to reach normal levels Q3 FY21. Order inflow and revenue in the Electro-Mechanical Projects and Commercial Air Conditioning Systems segment were impacted due to the lockdown.
Carried Forward order book was marginally higher as on June 30, 2020 at Rs 29.2 billion compared to Rs 28.4 billion as on June 30, 2019, mainly due to healthcare, pharma and processed food industry orders for commercial cooling products.
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