BLUESTARCO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | BLUESTARCO | Market Cap | 36,870 Cr. | Current Price | 1,793 ₹ | High / Low | 2,270 ₹ |
| Stock P/E | 89.5 | Book Value | 139 ₹ | Dividend Yield | 0.50 % | ROCE | 22.8 % |
| ROE | 18.2 % | Face Value | 2.00 ₹ | DMA 50 | 1,781 ₹ | DMA 200 | 1,809 ₹ |
| Chg in FII Hold | -1.39 % | Chg in DII Hold | 1.44 % | PAT Qtr | 76.4 Cr. | PAT Prev Qtr | 69.9 Cr. |
| RSI | 54.1 | MACD | -9.50 | Volume | 2,18,826 | Avg Vol 1Wk | 6,76,893 |
| Low price | 1,521 ₹ | High price | 2,270 ₹ | PEG Ratio | 1.57 | Debt to equity | 0.41 |
| 52w Index | 36.4 % | Qtr Profit Var | -21.1 % | EPS | 18.4 ₹ | Industry PE | 48.5 |
💹 Financials: Blue Star Company shows healthy return metrics with ROE at 18.2% and ROCE at 22.8%, reflecting efficient capital usage. Debt-to-equity at 0.41 indicates moderate leverage, manageable but worth monitoring. Quarterly PAT improved slightly from 69.9 Cr. to 76.4 Cr., though YoY profit variation is -21.1%, highlighting earnings volatility. EPS at 18.4 ₹ supports moderate earnings visibility.
📊 Valuation: The stock trades at a P/E of 89.5, significantly higher than the industry average of 48.5, suggesting overvaluation. The P/B ratio is ~12.9 (1793/139), which is steep. PEG ratio of 1.57 indicates valuations are stretched relative to growth. Dividend yield at 0.50% is modest, offering limited income return.
🏢 Business Model & Advantage: Blue Star operates in air conditioning, refrigeration, and commercial cooling solutions, with strong brand recognition and diversified product offerings. Its competitive advantage lies in technological expertise, wide distribution, and leadership in commercial cooling solutions. Demand is supported by infrastructure growth and rising consumer needs for premium cooling solutions.
📈 Overall Health: Financially stable with strong return ratios and moderate debt, but valuations are stretched. RSI at 54.1 suggests neutral momentum, while MACD at -9.50 indicates mild bearish sentiment in the short term. Long-term fundamentals remain intact, supported by brand strength and sectoral growth, though earnings volatility is a concern.
🎯 Entry Zone: Attractive entry around 1,650–1,700 ₹ range, closer to support levels. Current price of 1,793 ₹ is expensive relative to earnings. Long-term investors may accumulate gradually, but caution is advised due to high P/E multiples and earnings volatility.
Positive
- Strong ROCE (22.8%) and ROE (18.2%) indicate efficient capital use.
- Moderate debt-to-equity ratio (0.41) ensures manageable leverage.
- Strong brand presence in cooling and refrigeration solutions.
- DII holdings increased by 1.44%, reflecting domestic institutional support.
Limitation
- High P/E (89.5) compared to industry average (48.5).
- High P/B ratio (~12.9) suggests stretched valuation.
- Dividend yield at 0.50% offers limited income return.
- YoY profit variation (-21.1%) shows earnings volatility.
Company Negative News
- FII holdings decreased by -1.39%, showing reduced foreign investor confidence.
- Short-term technical indicators (MACD negative) suggest weak momentum.
Company Positive News
- Quarterly PAT improved from 69.9 Cr. to 76.4 Cr.
- DII holdings increased by 1.44%, reflecting domestic institutional support.
- Strong brand recognition and diversified product portfolio.
Industry
- Cooling and refrigeration industry is expanding due to infrastructure growth and rising consumer demand.
- Industry P/E at 48.5 indicates Blue Star trades at a premium valuation compared to peers.
Conclusion
Blue Star remains a fundamentally strong company with robust return ratios and brand leadership in cooling solutions. However, high valuations and earnings volatility limit upside potential. Entry around 1,650–1,700 ₹ is advisable for long-term investors, with cautious accumulation recommended given premium multiples.