{"id":1893,"date":"2021-05-10T11:57:00","date_gmt":"2021-05-10T11:57:00","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=1893"},"modified":"2021-05-10T11:57:00","modified_gmt":"2021-05-10T11:57:00","slug":"expect-a-demand-recovery-once-restrictions-are-lifted-blue-star","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2021\/05\/10\/expect-a-demand-recovery-once-restrictions-are-lifted-blue-star\/","title":{"rendered":"Expect a demand recovery once restrictions are lifted &#8211; Blue Star"},"content":{"rendered":"<p>&nbsp;<\/p>\n<p><b>Update on Indian Equity Market:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">On Monday, markets were on the rise, with Nifty increasing 128 points to close at 14,950. COAL INDIA (8.2%), <\/span><a href=\"https:\/\/www.nseindia.com\/get-quotes\/equity?symbol=UPL\"><span style=\"font-weight: 400;\">UPL<\/span><\/a><span style=\"font-weight: 400;\"> (8.0%), and HINDALCO (6.2%) were the top gainers on the index while <\/span><a href=\"https:\/\/www.nseindia.com\/get-quotes\/equity?symbol=SHREECEM\"><span style=\"font-weight: 400;\">SHREECEM<\/span><\/a><span style=\"font-weight: 400;\"> (-1.9%), <\/span><a href=\"https:\/\/www.nseindia.com\/get-quotes\/equity?symbol=BRITANNIA\"><span style=\"font-weight: 400;\">BRITANNIA<\/span><\/a><span style=\"font-weight: 400;\"> (-1.28%), and ULTRACEMCO (-1.28%) were the top losers for the day. Among the sectoral indices, Metal (4.7%), PHARMA (2.8%), and MEDIA (+2.5%) led the gainers. There were no sectoral losers for the day.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Excerpts of an interview with Mr. B Thyagarajan MD of Blue Star with CNBC- TV 18 dated 7th May 2021:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Till 15-April-21, secondary sales were growing at a healthy pace. The increased restrictions have resulted in the slow down of Air- Conditioning and Commercial Refrigeration verticals.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company feared a washout as evidenced in Q1FY21 but it actually posted a 20% lower compared to its earnings in Q1FY20. The Company hopes sales could normalize by the end of May and sees recovery in the months of June-July owing to a hot extended summer.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Blue Star had already hiked prices as of 1<\/span><span style=\"font-weight: 400;\">st <\/span><span style=\"font-weight: 400;\">April. As the Company has significant inventories owing to slow down, it doesn&#8217;t expect any more margin pressure and expects it to stabilize around 8%.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company witnessed a stellar growth in the pharma-health care sectors across air-conditioning and commercial refrigeration verticals due to covid-19 developments and vaccine transports.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The manufacturing sector in both Electro-Mechanical and Air-Conditioning segments showed good growth in Q4FY21. The 1st financial quarter is seasonally focused on residential air-conditioning sees its growth prospects dampened due to lockdowns.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Capacity expansion will be operational in the Wada plant for Deep Freezers by Q2FY22 and another plant is expected to be operational in H1FY23 for Air conditioning in Sri City.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It expects pent-up demand to drive residential air conditioning growth by around 10% for FY22 owing to prolonged work from home exposure and reduced spending on other luxuries.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><b>Asset Multiplier Comments:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The seasonal nature of the company\u2019s demand may impact the performance in the short term. The improved macro factors, longer summers due to climate change present good growth prospects over the long term.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The margins have been beaten down due to various factors, we expect pressure to ease off in the medium term.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><b>Consensus Estimates (Source: market screener website):\u00a0<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The closing price of Blue Star was \u20b9 833\/- as of 10-May-2021.\u00a0 It traded at 44x\/ 32x the consensus EPS estimate of \u20b9 19\/ \u20b9 26 for FY22E\/23E respectively.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The consensus price target is \u20b9 790\/- which trades at 30x the EPS estimate for FY23E of \u20b9 26\/-<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Disclaimer: &#8220;The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.&#8221;<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Update on Indian Equity Market: On Monday, markets were on the rise, with Nifty increasing 128 points to close at 14,950. COAL INDIA (8.2%), UPL (8.0%), and HINDALCO (6.2%) were the top gainers on the index while SHREECEM (-1.9%), BRITANNIA (-1.28%), and ULTRACEMCO (-1.28%) were the top losers for the day. Among the sectoral [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[31,30],"tags":[537,109,159,65,173],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1893"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=1893"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1893\/revisions"}],"predecessor-version":[{"id":1894,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1893\/revisions\/1894"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=1893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=1893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=1893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}