Blue Stars standalone numbers for 3QFY2016 have come in in-line with our estimates. The top-line for the quarter reported an impressive 15.1% yoy increase to Rs686cr. Raw material cost as a percentage of sales increased by 175bp yoy to 68.9% but the same got offset by a 94bp yoy and 341bp yoy decline in Employee and Other expenses as a percentage of sales to 9.7% and 17.4%, respectively. The EBITDA margin expanded by 259bp yoy to 4.1%. There was an exceptional loss of Rs2cr during the quarter due to bonus expenses for earlier years. Adjusting for the exceptional item, the net profit came in at Rs7cr. Improvement in macro scenario to support growth: The Cooling Products Division (CPD) has been the key performer for the company and is expected to carry the baton till the Electro Mechanical Projects and Packaged Air-conditioning Systems (EMPPAC) division fully recovers on the back of an expected improvement in the macro scenario. Slow order finalization and execution has impacted the EMPPAC divisions performance, which however is likely to rebound as market conditions improve. The company has been brisk in adding orders after clearing out a large chunk of legacy orders. The companys room air conditioning...