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Blue Star H1FY15 Net Profit grows 32% to Rs 40.06 crores

Financial Performance for Q2FY15

  • Airconditioning and commercial refrigeration major, Blue Star Limited reported Total Operating Income of Rs 637.97 crores for the quarter ended September 30, 2014, as compared to Rs 584.98 crores in Q2FY14, representing a growth of 9%.
  • Operating Profit (PBIDT excluding Other Non Operating Income) for the quarter declined 20% to Rs 20.61 crores from Rs 25.76 crores in the same period last year mainly due to an increase in marketing, advertising and sales promotion expenses.
  • Other Income for the quarter grew from Rs 2.91 crores to Rs 8.16 crores due to write-back of provisions.
  • Financial Expenses for the quarter declined by 17% to Rs 10.57 crores from Rs 12.80 crores in Q2FY14.
  • Consequently, Net Profit grew by 20% from Rs 7.52 crores in Q2FY14 to Rs 9.05 crores during the quarter.
  • Earnings per share for the quarter (Face value of Rs 2.00) stood at Rs 1.01 vis-à-vis Rs 0.84 in the corresponding quarter of the previous year.
  • The Electro Mechanical Projects and Packaged Airconditioning Systems business, accounting for 62% of the total revenues in the quarter, increased marginally by 3%, while segment results registered a decline of 5% to Rs 19.74 crores, mainly due to higher input costs. The erosion in profitability of this business is now under control since legacy orders now form only a small portion of the order book.
  • The revenue of Cooling Products during the quarter increased by 21%, while segment results grew an impressive 74% to Rs 14.17 crores over the same period. Though Q2 is typically a lean season for this line of business, an extended summer coupled with stable foreign exchange and commodity prices resulted in enhanced profitability.
  • The Professional Electronics and Industrial Systems business revenues increased by 25%, while segment results registered a growth of 16% to Rs 8.76 crores due to enhanced demand.
  • Carry Forward Order Book as on September 30, 2014 declined by 14% to Rs 1492 crores compared to Rs 1744 crores as at September 30, 2013. The Company was selective in pursuing orders which offered healthy margins and better commercial terms.

Financial Performance for the half-year ended September 30, 2014 (H1FY15)

  • For the half-year ended September 30, 2014, the Company reported Total Operating Income of Rs 1483.45 crores, as compared to Rs 1355.80 crores over the same period in the previous year, a growth of 9%.
  • Operating Profit (PBIDT excluding Other Non Operating Income) increased by 14% from Rs 64.38 crores to Rs 73.69 crores.
  • Net Profit grew 32% from Rs 30.29 crores to Rs 40.06 crores in H1FY15.

Outlook

The electro mechanical projects business was adversely affected as the closure of specific legacy orders in its last phase is taking longer than expected. Further, the commercial construction industry is yet to revive. However, considering the imminent improvement in the economic climate, this business is likely to improve in the long term. The cooling products business is expected to drive growth considering that Blue Star enjoys a strong brand perception in a low penetrated market thereby offering significant potential. The Company will continue its pursuit of prudent fiscal management in order to sustain this performance for the balance half of the year.

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