BlueStar ltd. concall was yesterday evening

"We are witnessing a huge investment in manufacturing sector consequent to domestic demand growth and localization under atma Nirbhar bharat programme."

Here are the concall key takeaways 😀

🧵👇
Financial highlights

- Business continued to stage and encouraging recovery and has almost scaled up to last year's qiarter level

- An improved customer buying sentiment continued in Q3 supported by more stable business environment
- Casflows remain stable

- Revenue from operations recovered 90.9%

- Ebitda was Rs. 81.56 crores. Driven by improved profitability across all segments

- Tax expense was Rs. 12.96 crores

- Net profit grew 86% compared to last year quarter.

- Rs. 3157.9 crore: order book
- Total capital employed has reduced as a result of the focus towards working capital efficiency.

- Net borrowing has reduced making debt to equity ratio 0.16 in Q3 FY21.

- Rs. 127.62 crores: net borrowings
Business highlights

1) Electro mechanical projects and commercial air-conditioning system

- Recovered to 77% compared to last year quarter.

- Order inflow: Rs. 636 crore

- Company received a prestigious order in electromechanical project
- Continue to focus on infrastructure sector such as water distribution system and metro railwailays.

- Factories, data center and warehousing center are going to give some great opportunities in the coming quarter
- Commercial air conditioning business recovered well due to good traction in the Healthcare, Pharma and industrial and government sector.

- Sector such as hotels, offices, marriage halls are likely to revive in second half of the year.
- Company is the single largest player in commercial air conditioning business.

- Major order backed in Q3 were Dmart (on all india basis), ISRO and L&T Bangalore.
- International demand had some good recovery especially in middle east market.

- Upcoming Dubai expo 2021 is going to provide good opportunities on construction sector.

- Continue to expand the bluestar product range and building brand awareness and visibility.
2) Unitary products

- Recovered upto to 117% compared to last year quarter

- Cost rationalization helped to achieve higher profitability.

- Increase in demand in cooling and purification business was due to festive season and improved share of billing from e-commerce.
PLI scheme

- Company has set aside 3000 crore for finished goods which room air conditioner and 2000 crore for components.

- Company intents to participate in th scheme. It has acquired 20 acres of land.
- Company is waiting for more clarity in the specifity of the scheme.

- Some credit for the past record would be factored into.
Commercial refrigeration business

- Witnessed a good traction.

- Demand of cold room increased due to the vaccination drive.

- Company is market leader in Healthcare and pharma sector and it offer deep freezers and vaccine transporter.
- Company has a know how for storage of vaccine from -2 degree to -80 degrees

- Company has received orders from govt in the augmentation of vaccine projects.

- Major order were from SK logistics and Metropollis
Vaccine drive

- The company installs the cold rooms where vaccines are stored.

- The other product relates to medical refrigeration equipment, then there are Iceline refrigeration.

- The comapny has invested in State government infrastructure.
- The next growth will be when the government allows privatization of vaccination programme coz then the Healthcare company will be able to directly participate.
- Increase in Raw material prices in steel and copper has led the company to increase the prices by 4-6%.

- Company is witnessing a huge investment in manufacturing sector consequent to domestic demand growth and localization under atma Nirbhar bharat programme.
Cooling products

- Some dealers are stocking up their inventory levels because of upcoming summer demand.

- Company will again review the pricing of their product towards the end of march.
Future growth

- Growth will be sustainable, market has weathered the tough and the rough times.

- If there are no significant disruptions in next 3-6 months then the demand growth would be awesome.
Supply chain side

- Company is manufacturing 100% IDUs ....company has become self sufficient in IDU manufacturing.

- Company has taken care of buying requirements for Q4 in Q3 itself.

- The Q1 for orders have been placed by the company.
Water purifiers

- The business is going to hit breakeven level in the current year.
AC business

- Market share is 13%

- No backward integration on compression side

- Ecommerce sales is close towards 6%.
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