Target: ₹1,950
CMP: ₹1,744.45
Blue Star (BLSTR) is continuously gaining market share in the Indian RAC segment. Its share improved from around 7 percent in FY14 to around 14 percent in FY2025. The company is now targeting a share of around 15 percent by FY27E. BLSTR maintains a strong leadership position in the commercial refrigeration business, holding over 31 percent share of freezers and modular cold storage.
We expect sales of its unitary cooling products (UCP) to decline around 3 percent year-on-year in FY26, primarily due to a weak summer season. However, we forecast FY27/28 revenue growth of around 19/18 percent year-on-year, driven by a recovery in demand.
We expect EBIT margin to be in the high single digits and gradually improve as BLSTR achieves greater scale of operations and advances indigenization.
BLSTR is among the top performers in the consumer durables space, outperforming Havells, Voltas and BSE Sensex by 181 percent, 127 percent and 161 percent, respectively, in the last three years. We initiate coverage on the stock with a Neutral rating and a SoTP-based TP of ₹1,950 (valued at 50x Dec 27 EPS for UCP, 40x Dec 27 EPS for MEP & CAC and 25x Dec 27 EPS for PEIS).
Published on November 25, 2025