Conference Call with Blue Star Ltd Management and Analysts on Q3FY22 Performance and Outlook. Listen to the full earnings transcript.
Consumer Electronics company Blue Star declares Q3FY22 result: Blue Star’s Q3FY22 revenue surpasses pre-pandemic levels; Operating profit all-time high at Rs 90.59 crores The Company’s Revenue from Operations increased by 34.0% to Rs 1506.22 crores for the quarter ended December 31, 2021, on a consolidated basis, compared to Rs 1123.89 crores during the same period in the previous year. The Operating Profit (PBIDTA excluding Other Income and Finance Income) for the quarter was Rs 90.59 crores (6.0% of Revenue) compared to Rs 81.56 crores (7.3% of revenue) in Q3FY21. Impact of increase in commodity prices, raw materials and ocean freight and roll back of FY21 cuts in discretionary spends led to a lower EBITDA percentage for Q3FY22. Net Profit for the quarter grew by 29.4% to Rs 47.57 crores compared to Rs 36.77 crores in Q3FY21. Other Income (including Finance Income) for Q3FY22 was Rs 13.38 crores compared to Rs 8.09 crores in Q3FY21. Other Income for Q3FY22 was higher on account of a subsidy received for one of the Company’s manufacturing plants. Finance Cost for the quarter decreased to Rs 11.56 crores from Rs 14.92 crores in Q3FY21 due to a reduction in gross borrowings and lower cost of funds. The Tax expense for the quarter was Rs 22.75 crores compared to Rs 12.96 crores in Q3FY21. Earnings per share for Q3FY22 (Face value of Rs 2.00) was Rs 4.94 compared to Rs 3.82 in Q3FY21. Carried Forward Order Book as on December 31, 2021, grew by 4.5% to Rs 3301.33 crores compared to Rs 3157.90 crores as on December 31, 2020. Net Borrowing as on December 31, 2021, increased marginally to Rs 165.11 crores (debt equity ratio of 0.18) compared to Rs 131.01 crores as on December 31, 2020 (debt equity ratio of 0.16), owing to planned advancement in inventory levels to meet the demand for the upcoming season and investments in the expansion projects at Sri City and Wada Revenue of the Electro-Mechanical Projects and Commercial Air Conditioning Systems grew by 41.7% to Rs 829.85 crores in Q3FY22 compared to Rs 585.49 crores in Q3FY21. The Segment Result for Q3FY22 grew by 53.6% to Rs 52.41 crores compared to Rs 34.11 crores in Q3FY21. The overall pace of execution of projects improved compared to the previous quarter. Order inflows from the Factories and Light Industrial sectors continued to be encouraging and order inflows from the Infrastructure sector also began to pick up. Continued traction in the Healthcare, Pharmaceutical, Industrial and Government customer segments coupled with the increased pace of revival in the traditional segments, namely, Buildings, Retail, IT and Educational Institutions enabled encouraging growth for the Commercial Air Conditioning business. Unitary Products revenue grew by 23.7% to Rs 609.68 crores in Q3FY22 compared to Rs 492.97 crores in Q3FY21. The Segment Result for Q3FY21 was almost flat at Rs 38.78 crores compared to Rs 38.79 crores in Q3FY21 primarily due to input cost pressures. Focus on expansion of distribution footprint contributed to the robust revenue growth in the Room ACs business. Improvement in demand for modular cold rooms from the Pharma, Healthcare, E-commerce, and Food & Beverages segments coupled with a revival in demand for Kitchen Refrigeration equipment with the opening up of hotels and restaurants enabled growth in revenue for the Commercial Refrigeration business during the quarter. The Professional Electronics and Industrial Systems Business revenue grew by 46.8% to Rs 66.69 crores in Q3FY22 compared to Rs 45.43 crores in Q3FY21 driven by a few high-value orders secured in the Data Security Solutions business and growth in revenue from the Healthcare business. The Testing Machines business also continued to witness growth with a revival of investments in the manufacturing sector. Segment Result grew by 54.5% to Rs 12.76 crores compared to Rs 8.26 crores in Q3FY21. Vir S. Advani, Vice Chairman & Managing Director, Blue Star Limited adds, “We delivered an impressive performance for the quarter, despite margins being impacted by the volatility in commodity prices and ocean freight. With the third wave causing a relatively moderate disruption from the first week of January 2022, we are anticipating economic activities to revive fully by the end of February and are optimistic on the growth outlook for the peak selling months, commencing March. “Our mass premium product portfolio in the Room ACs business continues to resonate well with distributors and customers; prospects for our expanded range of commercial refrigeration products are encouraging; and increased investments by both the public and private sectors are expected to offer good opportunities to our Projects business.” Result PDF
Financial Highlights The Company’s Revenue from Operations increased by 37.4% to Rs 1239.74 crores for the quarter ended September 30, 2021, on a consolidated basis, compared to Rs 902.12 crores during the same period in the previous year. The Operating Profit (PBIDTA excluding Other Income and Finance Income) for the quarter was Rs 70.70 crores compared to Rs 55.08 crores in Q2FY21. Net Profit for the quarter was Rs 31.45 crores compared to Rs 15.40 crores in Q2FY21. Other Income (including Finance Income) for Q2FY22 was Rs 8.12 crores compared to Rs 5.86 crores in Q2FY21. Finance Cost for the quarter decreased to Rs 11.18 crores from Rs 17.85 crores in Q2FY21 due to reduction in borrowings. The Tax expense for the quarter was Rs 15.99 crores compared to Rs 7.42 crores in Q2FY21. Earnings per share for Q2FY22 (Face value of Rs 2.00) was Rs 3.27 compared to Rs 1.59 in Q2FY21. Carried Forward Order Book as on September 30, 2021 grew by 5.5% to Rs 3185.91 crores compared to Rs 3019.57 crores as on September 30, 2020. Net Borrowing as on September 30, 2021, reduced to Rs 44.34 crores (debt equity ratio of 0.05) compared to Rs 344.06 crores as on September 30, 2020 (debt equity ratio of 0.44) on account of prudent working capital management and capital allocation measures. Consolidated Financial Performance for the half-year ended September 30, 2021 (H1FY22) For the half-year ended September 30, 2021, the Company reported Revenue from Operations of Rs 2291.78 crores compared to Rs 1528.14 crores over the same period in the previous year, a growth of 50.0%. Operating Profit (PBIDTA excluding Other Income and Finance Income) was Rs 112.93 crores compared to Rs 56.44 crores during the same period last year. Net Profit for the half-year ended September 30, 2021, was Rs 44.16 crores compared to Net Loss of Rs 4.20 crores in H1FY21. Vir S. Advani, Vice Chairman & Managing Director, Blue Star Limited adds, “With the revenue reaching pre-COVID level in Q2FY22, 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.” Result PDF