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Result Synopsis

BLSTR now has made a habit of beating consensus, Q3 is the 5th quarter in row where they have delivered positive surprise. All segments have contributed to its growth with all its verticals registering strong double?digit growth. Order?inflow continues to be robust with order?book swelling to Rs48bn which has been highest ever. Execution is expected to keep pace with inflows and backlog as there is pressure on execution from its customers. Company expects strong traction to continue in project business as there is strong demand from infrastructure and capex related activity with office space witnessing increased traction. On UCP front both RAC and commercial refrigeration has seen continued growth even in the lean season. BLSTR has been able to outperform its peers in terms of revenue as well as margins in challenging environment.   The work done in expanding distribution and extending product portfolio into affordable segment is now bearing fruits resulting in traction in North which has been the weak area for the company. Given the improved pace of execution in project business and market share gains in RAC, we remain positive on the stock. We upgrade the stock to BUY as we foresee growth momentum and outperformance to continue without compromising on the profitability.   BLSTR is estimated to deliver strong double?digit CAGR revenue growth on back of improved execution of projects, market share gains in RAC and continued growth momentum in Commercial refrigeration. We now pencil in revenue/EBITDA/PAT CAGR of 21%/29%/42% over FY22?25E. We have increased our SoTP?based PT to Rs1,521 vs earlier Rs1,370 valuing Unitary products business at 45x rolling forward our valuation multiple

Result Highlights

* Business update – Company has been delivering above expectation result now for past 5 quarters. All the segments continue to do well, and company is on course to achieve the internal target.  

* Margins – Margins are expected to remain lower as the benefit of lower commodity prices are negated by INR appreciation. The company is maintaining guidance of EBITDA margin 0f 8?8.5%.

* EMPS – Order book stood at Rs48.6bn growth of 47% YoY. Order inflow stood at Rs17bn has grown by 80% YoY. The company has received its first order in railway electrification. The company has received order inflows from Infrastructure segment. Company have bagged majority of orders from newly entered segment of railway electrification.

* Demand Outlook – Enquiries continues to remain strong with order finalization also happening. Order finalization have resulted in strong order inflow with order book swelling to all time high. Company has been ordering inventory as it will have to execute the strong order book in coming time.

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