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Blue Star Limited company details report

Blue Star Limited, incorporated in 1943, headquartered in Mumbai, is a leading heating, ventilation, air conditioning and commercial refrigeration (HVAC&R) company, and a major player in the mechanical, electrical, plumbing, and fire-fighting (MEP) space with a network of 31 offices, 7 modern manufacturing facilities – 2 at Himachal Pradesh and one each at Dadra, Ahmedabad and 2 in Wada and one at Sri City. It has 4,120 channel partners. The Company has 7,500 stores for room ACs, packaged air conditioners, chillers, cold rooms as well as refrigeration products and systems, along with 1,172 service associates reaching out to customers in over 900 towns. The Wada plant has an installed production capacity of 3L deep freezers and 1L water coolers, while the Ahmedabad plant has a dedicated capacity for deep freezers of 1L units. The Wada plant also manufactures cold room panels, evaporating units, and condensing units. The Company’s integrated business model of a Manufacturer; Engineering, Procurement and Construction (EPC) services provider; and an after-sales service provider; not only enables the company to offer end-to-end solutions to its customers across building, industrial, and infrastructure segments, but also facilitates delivery of these offerings in an agile manner. It exports AC&R (air conditioning & refrigeration) products and Original Equipment Manufacturing (OEM)/Original Design Manufacturing (ODM) businesses for globally recognized brands such as Danfoss and Rheem and solutions to 19 countries across the Middle East, Africa, SAARC and ASEAN regions. Through its joint ventures in Qatar and Malaysia, the company also undertakes MEP projects for residential, commercial and infrastructure in those markets. The company is a market leader in the product categories of modular cold rooms, deep freezers and storage water coolers and estimates their market share, both the residential segment and institutional segment put together, to be 14%. In volume terms they are marginally higher than 10%. It crossed ~15.7 lakh units during FY25 in RAC segment.

Electro - Mechanical Projects and commercial air conditioning system – This business segment covers the design,manufacturing, installation, commissioning and maintenance of central air conditioning plants, packaged/ducted systems and Variable Refrigerant Flow (VRF) systems, as well as contracting services in mechanical works, electrification, plumbing and fire-fighting, and water distribution. It also comprises after-sales services such as revamp, retrofit and upgrades, which covers a wide repertoire of operation and maintenance services for efficient functioning of electro-mechanical utilities. Unitary Products – The company offers a wide variety of contemporary and highly energy-efficient room air conditioners for both residential as well as commercial applications. It also manufactures and markets a comprehensive range of commercial refrigeration products and cold chain equipment. Besides, the company has water purifiers, air purifiers and air coolers in its product portfolio. This segment is seasonal in nature. Professional Electronics and Industrial Systems – Exclusive distributor in India for many internationally renowned manufacturers of professional electronic equipment & services, as well as industrial products and systems. This business is managed by the company’s wholly owned subsidiary, Blue Star Engineering & Electronics Limited.

#SALES #GROWTH 5 Year CAGR 13.1%

In FY24 the revenue registered were ₹9,685 cr up by 21% YoY. The company sold over 1 mn units during the year. The order book for FY24 was at ₹5,477 cr. In 9M FY25, the company’s revenue grew by 25% YoY to ₹7,949 cr. The carried forward order book as of 31st December 2024 increased by 12.8% YoY to ₹6,810 cr. The RAC market share stood at 14%. Segment-wise, UCP (Unitary products and commercial refrigeration) grew by 27%, while PEIS (Professional electronics and industrial systems) declined by 3%. Room AC growth was driven by a strong festive season, and the commercial refrigeration business resolved regulatory challenges in water coolers and deep freezers. The EMP (Electro-Mechanical Projects and commercial air conditioning systems) business saw 26% YoY growth, with progress in factory and data center orders, although demand from commercial real estate and infrastructure was subdued.

#EBITDA #GROWTH 5 Year CAGR 13.9%

In FY24, the EBITDA was ₹665 cr v/s ₹493 cr in FY23. In 9M FY25, the EBITDA grew by 41% to ₹597 cr. The major cost components are cost of material consumed, advertising and legal costs (other operating expense). Key components for manufacture of the company’s products such as compressors, copper tubes, electronic parts, indoor units for split air conditioners and inverter drives are sourced from vendors in China and some other countries. This is mitigated by diversifying procurement sources along with backward integration at plant.

#PAT #GROWTH 5 Year CAGR 16.8%

In FY24, PAT was ₹414 cr and effective tax rate 26%. In 9M FY25, the PAT registered were ₹398 cr registering a growth of 56% YoY.

#EBITDA #MARGIN

In FY24, EBITDA margin was 6.9% whereas segmental EBIT margin for Electro-Mechanical Projects and commercial air conditioning systems was 7%, Unitary products was 7.8% and for Professional electronics and industrial systems it was 14%. In 9M FY25 EBITDA margin was 7.5% but segmental EBIT margin for Electro-Mechanical Projects and commercial air conditioning systems was 8.5%, Unitary products and commercial refrigeration at 8.4% Professional electronics and industrial systems at 8.1%.

#PAT #MARGIN

In FY24, the PAT margin was 4.3%. In 9M FY25, the PAT margin was at 5%.

#ROCE

In FY24, capital employed during the year was ₹2,731 cr and PBIT ₹615 cr and the ratio was ~26%. ₹665 cr was employed in the electromechanical projects and commercial air conditioning systems and ~ ₹1,251 cr in unitary products segment whereas remaining amount was in others.

#COMPANY #POTENTIAL

• Indian appliances and consumer electronics industry stood at US $9.84 billion in 2021 and is expected to more than double to reach ₹1.48 lakh cr (US $21.18 billion) by FY25. (Source : IBEF) • The Room Air Conditioner Market (RAC) grew 45% over FY22 in value terms. As a result, the overall market size grew to ₹22,750 cr in FY23, of which the market for central air conditioning, including central plants, packaged and ducted systems, and VRF systems was around ₹4,250 cr, while the market for room air conditioners comprised the balance ₹18,500 cr. • The overall AC industry (both residential and commercial), currently valued at around ₹27,500 cr in FY24, is likely to double in the next four years. In FY24, of which the market for central air conditioning, including central plants, packaged and ducted systems, and VRF systems was around ₹4,500 cr, while the market for room air conditioners comprised the balance ₹23,000 cr. • In FY23, the Indian RAC has grown to 8.4 million units and 10 million units in FY24. • The demand growth in the segment is expected on the back of rising urbanization, increasing disposable income of the middleclass population, easy consumer credit, wide usability of online sales and decreasing replacement cycle. • As a part of the Atmanirbhar Bharat Program, the Government has announced Production Linked Incentive (PLI) Schemes for many product categories, the ecosystem for air conditioning components is developing fast in the country. In pursuit to secure their supply chain, European and American players are looking at reliable and capable manufacturers outside China. • E-commerce, as a distribution channel, has been witnessing phenomenal growth owing to the impetus provided by the Pandemic, thereby advancing its penetration in the country by 12-18 months. The Indian E-commerce market is expected to grow 21% to ₹58,580 cr (US $75 Billion) in 2022 and is likely to reach ₹1,01,547 cr (US $130 Billion) by 2025 growing at a CAGR of over 20%. The number of internet connections in 2021 increased significantly to 830 million, driven by the ‘Digital India’ programme.

#COMPANY #OUTLOOK

• The company aims to grow faster than the market in its core businesses of air conditioning and commercial refrigeration. The company is also planning to grow revenue from adjacencies such as Air Coolers, MEP services for Water Supply projects, and Railway Electrification. It will consolidate its position in the Middle East, Africa and South Asia regions with deeper market penetration and the introduction of innovative products and solutions. • It aims to expand the global footprint by entering North America and Europe as Original design and manufacturing (ODM) solutions provider. • It aims to strengthen its R&D and innovation capabilities and deploy total cost management programme across various businesses and functions. • The company targets to achieve 15% market share in FY25 in the RAC segment. • There is enhanced focus on increasing penetration in Tier 3/4/5 cities and developing more executive dealers there. • They have guided for a margin of ~7%-7.5% for electro-mechanical projects & commercial air conditioning systems segment and ~8%-8.5% for unitary products and commercial refrigeration products segment. • Capex for the upcoming 3 years will be in the range of ~₹750-₹800 crore per year. • The Sri City Plant produced more than 300,000 air conditioners in FY24 and is on course to double that production in the current fiscal year. • It plans to invest over ₹50 cr in advertising during the upcoming summer season.

Blue Star Limited 1550-1650
Expected level 2000
Support 1450

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