Reduce Blue Star, target price Rs 544: ICICI Securities

ICICI Securities has given a reduce rating to Blue Star with a target price of Rs 540. The share price moved up by 0.38 per cent from its previous close of Rs 636.65. The stock’s last traded price is Rs 639.05.

Blue Star Ltd., incorporated in the year 1949, is a Mid Cap company (having a market cap of Rs 6155.42 Crore) operating in Consumer Durables sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 626.02 Crore, down 51.82 % from last quarter Sales of Rs 1299.36 Crore and down 60.26 % from last year same quarter Sales of Rs 1575.45 Crore. The Company reported net profit after tax of Rs -19.95 Crore in latest quarter.

Investment Rationale
Overall revenues are expected to be down 19% YoY due to 23% YoY decline in EMP segment on slow execution because of lockdown and 15% decline in cooling products segment. Overall margin is expected to decline 110bps to 4.8% with EMP margin at 4% and cooling products margin at 3%.

Promoter/FII Holdings
Promoters held 38.8 per cent stake in the company as of March 31, 2020, while FIIs held 10.1 per cent, DIIs 31.6 and public and others 29.6 per cent.