Blue Star’s Strong Q2 Performance Boosts Stock

Blue Star's Strong Q2 Performance Boosts Stock

VoM News Desk | October 31, 2023 | 01:09 PM IST | Breaking News | Follow on Google News

Blue Star’s Strong Q2 Performance Boosts Stock

Blue Star’s Strong Q2 Performance Boosts Stock

Shares of Blue Star, a consumer durable firm, surged in early trading on Tuesday following the company’s robust Q2FY24 performance. The company reported a 19.5% increase in its consolidated revenue from operations to ₹1,890 crore, up from ₹1,582 crore in the same period the previous year.

Revenue Growth Segments

The revenue from its electro-mechanical projects & commercial air conditioning systems segment, which constitutes over 55% of the company’s total revenue, rose by 12.1% to ₹1,077 crore in Q2 FY24 compared to ₹961.22 crore in Q2 FY23. The electro-mechanical projects business saw a slowdown and delays in order finalizations in the commercial buildings sector but had buoyant inquiries and order finalizations in sectors like factories, data centers, railway electrification, water MEP, metro railway, and healthcare. The commercial air conditioning business continued to attract demand from the industrial, healthcare, and retail sectors.

Additionally, the revenue from the Unitary Products segment surged by 38% to ₹729 crore in Q2 FY24, while the revenue from the professional electronics and industrial systems segment declined by 9.4% to ₹83.70 crore in the quarter due to a slowdown in the data security business.

Profitability Improvement

Blue Star’s operating profit (PBIDTA excluding other income) for the quarter improved significantly to ₹122.69 crore (6.5% of revenue) from ₹85.59 crore in Q2 FY23 (5.4% of revenue). This improvement was driven by enhanced scale and higher gross margins.

On the bottom line, the company reported a consolidated net profit of ₹70.77 crore in Q2 FY24, a 66% improvement over Q2 FY23’s net profit of ₹42.64 crore. For H1 FY24, Blue Star’s consolidated net profit reached ₹151.14 crore, reflecting a 31.75% surge compared to H1 FY23’s net profit of ₹116.99 crore.

Growth and Investment

The company remains committed to expanding manufacturing capacity, accelerating research and development, and digitalization as part of its growth and profitability improvement initiatives. As a result, the capital employed as of September 30, 2023, increased to ₹2,069.62 crore compared to ₹1,441.16 crore as of September 30, 2022.

Impressive Stock Performance

Following the company’s impressive Q2FY24 performance, the stock opened with a 6.53% gap up at ₹929 apiece and reached an all-time high of ₹955 apiece, up by 9.51%. By 10:00 AM, the stock was trading with a gain of 7.50% at ₹937.50.

This year, Blue Star shares have performed exceptionally well, delivering a return of 52.46%, the highest yearly performance since CY17.

Disclaimer: The opinions and suggestions provided in this article are those of individual analysts and do not reflect the viewpoints of VoM News. We encourage investors to consult with certified experts before making any investment choices.

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