The pending order book at end-Q4 FY19 across its MEP business was Rs 2,430 crore, up 16 percent YoY. FY19 orders were Rs 2,950 crore, up 19 percent YoY
Shares of air conditioner maker Blue Star jumped 6 percent intraday on May 7 as Anand Rathi initiated coverage with a buy call on the stock after Q4 earnings.
"We initiate coverage on it, with a target price of Rs 947. For FY19-21, we model 14 /26 percent CAGRs in revenue/PAT, with no major rise in net working capital required, eventually leading to the RoCE expanding from 25 percent in FY19 to 30 /35 percent in FY20/FY21," the brokerage said.
The stock was trading at Rs 742.65, up 4.66 percent on the BSE, at 12:23 hours IST.
Anand Rathi said Blue Star has again showcased its robust and agile business model, developed over time.
"Its rising return on capital employed (RoCE) in challenging times, from 20.5 percent in FY18 to 24.9 percent in FY19, depicting its ability to deliver superior returns in FY20/FY21," it added.
Blue Star reported 19 percent YoY growth in consolidated revenue during January-March period 2019.
It was led by 21 percent YoY growth across project divisions and 19 percent across the UPC segment, while the professional electronics division declined 11 percent.
Anand Rathi said the pending order book offers visibility.
The pending order book at end-Q4 FY19 across its MEP business was Rs 2,430 crore, up 16 percent YoY. FY19 orders were Rs 2,950 crore, up 19 percent YoY.
Blue Star received orders for more than 100 MEP projects in FY19, which it expects to expand in FY20, the brokerage said.
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