For 3QFY2019, Blue Star posted results below our expectations on the bottom-line front.
The company reported ~18% yoy top-line growth, whereas PAT was down ~70% yoy due
to losses in JV and higher interest cost.
Outlook & Valuation: We forecast Blue Star to report top-line CAGR of ~12% to `5,871cr
over FY2018-20E on the back of healthy demand growth in Air Conditioning and Unitary
Products division. On the bottom-line front, we estimate ~17% CAGR to `198cr owing to
improvement in volumes and better operating margins. We maintain our Buy
recommendation on Blue Star with a Target Price of `867.
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