BLUESTARCO - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of Blue Star Ltd (BLUESTARCO), a leading player in air conditioning and commercial refrigeration. I’m evaluating its financial strength, valuation metrics, business model, and technical indicators to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹21.8 — solid earnings base

PAT Qtr: ₹109 Cr vs ₹157 Cr — -25.7% QoQ, seasonal softness

ROE: 18.2%, ROCE: 22.8% — strong capital efficiency

Debt-to-equity: 0.18 — low leverage, healthy balance sheet

Dividend & Cash Flow

Dividend Yield: 0.46% — modest, consistent payout

Cash flows supported by strong consumer and institutional demand

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 90.0 Overvalued vs industry PE of 56.6

P/B Ratio ~14.1 Significant premium to book value

PEG Ratio 1.58 Fair — growth justifies valuation

Intrinsic Value ~₹1,850–₹1,900 Trading near fair value

Valuation is elevated, but justified by strong ROE, brand strength, and growth visibility.

❄️ Business Model & Competitive Edge

Industry: Consumer durables — cyclical, brand-driven

Moat

Premium brand in cooling solutions

Diversified portfolio across residential, commercial, and industrial segments

Strong distribution network and service infrastructure

Catalysts

5-year return of 537.8% with 20.4% quarterly revenue growth

Expansion into water purifiers, air purifiers, and commercial HVAC

Technical forecast suggests 2025 targets of ₹1,951–₹2,030

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Despite short-term profit contraction, Blue Star remains a high-quality compounder with strong fundamentals.

📉 Technical & Entry Zone

Current Price: ₹1,961

DMA 50/200: Trading above both — bullish trend

MACD: +26.1 — positive momentum

RSI: 64.2 — neutral to slightly bullish

📌 Suggested Entry Zone: ₹1,850–₹1,900

This range offers a better margin of safety and aligns with intrinsic value and DMA support.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially for consumer durables exposure

Buy on dips near ₹1,880 for long-term compounding

2026 Target Price: ₹2,300–₹2,450 based on technical and fundamental projections

2030 Forecast: ₹3,203

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⭐ Fundamental Rating

4.3

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walletinvestor.com

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stockpricearchive.com

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