Target: ₹1,950
CMP: ₹1,744.45
Blue Star (BLSTR) is steadily gaining market share in the Indian RAC segment. Its share improved to around 14 per cent in FY25 from about 7 per cent in FY14. The company is now targeting about 15 per cent share by FY27E. BLSTR retains a strong leadership position in the commercial refrigeration business, holding over 31 per cent share in deep freezers and modular cold rooms.
We estimate that its unitary cooling product (UCP) revenue would decline around 3 per cent year on year in FY26, primarily due to a weak Summer season. However, we project revenue growth of about 19/18 per cent year on year in FY27/28, fuelled by a recovery in demand.
We estimate that the EBIT margin will be in high-single digits and gradually improve as BLSTR achieves a higher scale of operations and increases indigenisation.
BLSTR is among the top performers in the consumer durables space, outperforming Havells, Voltas, and the BSE Sensex by 181 per cent, 127 per cent and 161 per cent, respectively, over the last three years. We initiate coverage on the stock with a Neutral rating and an SoTP-based TP of ₹1,950 (valued at 50x December 27E EPS for UCP, 40x December 27E EPS for MEP & CAC, and 25x December 27E EPS for PEIS).
Published on November 25, 2025
