Blue Star gains after Q2 FY22 PAT doubles to Rs 31 cr

Blue Star rose 1.52% to Rs 950.10 after the company's consolidated net profit surged 104.22% to Rs 31.45 crore on a 37.42% increase in revenue from operations to Rs 1,239.74 crore in Q2 FY22 over Q2 FY21.

The quarter commenced on a strong note with an extended summer in the northern parts of the country. The company witnessed healthy demand and robust volume growth for room air conditioners and refrigeration products in Q2 FY22 compared to Q2 FY21. This was on account of the ebbing of the second wave of the pandemic and the consequent easing of restrictions combined with improvement in consumer sentiment.

Commercial, Manufacturing and other Institutional segments also revived. Collections were healthy resulting in substantial reduction in borrowings. Escalation in commodity prices, logistics costs and depreciation of the rupee exerted margin pressure, which was partially offset by price increases, cost reduction initiatives and improvement in operational efficiency.

The operating profit (PBIDTA excluding Other Income and Finance Income) for the quarter was at Rs 70.70 crore as compared to Rs 55.08 crore in Q2 FY21, rising 28.35% Y-o-Y. Finance Cost for the quarter decreased by 37.36% to Rs 11.18 crore from Rs 17.85 crore in Q2 FY21 due to reduction in borrowings. Carried Forward Order Book as on 30 September 2021 grew 5.5% to Rs 3,185.91 crore as against Rs 3,019.57 crore as on 30 September 2020. Net Borrowing as on 30 September 2021, tanked 87.11% to Rs 44.34 crore (debt equity ratio of 0.05) as compared to Rs 344.06 crore as on 30 September 2020 (debt equity ratio of 0.44) on account of prudent working capital management and capital allocation measures.

Vir S. Advani, the vice chairman and managing director (MD) of Blue Star, stated: "With the revenue reaching pre-COVID level in Q2 FY22, we expect the growth momentum to continue through Q3 and Q4 leading up to the next summer season. The pricing corrections will continue, depending on movement in input costs. At the same time, product cost rationalization through value engineering and alternate designs, as well as operating cost reduction will be undertaken to counter the margin pressure."

Blue Star is an air-conditioning and commercial refrigeration company. The company conducts various activities, such as electrical, plumbing and fire-fighting services. Its segments include electro-mechanical projects and packaged air conditioning systems, and unitary products.

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