Blue Stars results came in above our expectations for 2QFY2020 on both top-line and
bottom-line fronts. The company reported 21% yoy top-line growth and PAT was up
94% yoy due to healthy sales and improvement in operating margin.
Outlook & Valuation: We estimate Blue Star to report top-line CAGR of ~13% to
`6,651cr over FY2019-21E on the back of healthy demand growth in Air Conditioning
and Unitary Products division. On the bottom-line front, we estimate ~20% CAGR to
`269cr owing to improvement in volumes and better operating margins. We maintain
our Buy recommendation on Blue Star with a Target Price of `980.
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