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Blue Star on Monday reported a jump in second-quarter profit, aided by a steady demand for its air conditioners amid a weak monsoon season, along with a strong order book.

The company posted a consolidated net profit of 706.7 million rupees ($8.5 million) for the quarter ended Sept. 30, up over 66% from last year. Revenue from operations rose 19.5%.

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KEY CONTEXT

The September quarter has been seasonally weaker for cooling-product makers as the arrival of monsoon provides relief from the scorching Indian summer. However, a weaker monsoon this year has led to a relatively steadier demand for fans and air conditioners, helping companies like Blue Star.

Additionally, analysts said Blue Star would benefit from the execution of its strong order book. The company said its carried forward order book grew 44.4% year-on-year to 60.09 billion rupees.

Blue Star, which has seen a sharp rise in order inflows following a revamp of its portfolio and foray into railway electrification, in August said the government's push in manufacturing was driving growth in its commercial segment.

Rival Havells India earlier this month posted second-quarter profit of 2.49 billion rupees, up 33% year-on-year.

PEER COMPARISON

Valuation (next Estimates (next Analysts' sentiment

12 months) 12 months)

RIC PE EV/EBITDA Revenue Profit Mean # of Stock to Div yield

growth growth rating analyst price target (%)

s

Blue Star Ltd 38.18 23.25 17.32 39.19 BUY 17 1.05 0.69

Voltas Ltd 42.98 31.68 16.44 43.34 HOLD 38 0.92 0.51

Havells India Ltd 50.29 33.97 13.81 26.94 BUY 21 0.88 0.60

Crompton Greaves Consumer 28.28 20.65 10.29 19.79 BUY 35 0.84 1.05

Electricals Ltd

* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

JULY-SEPTEMBER STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 83.2200 Indian rupees