Blue Star (500067) Q4 03/04 earnings summary

Executive summary

• FY03/04 total income rose 19% to Rs. 716.06 crore; PBT increased 16% to Rs. 46.59 crore and PAT rose 5% to Rs. 32.55 crore.

• Order inflow grew 30% to Rs. 800.70 crore; year-end backlog rose 40% to Rs. 383.45 crore, supporting continued growth in FY04/05.

• Central airconditioning and professional electronics grew, while Cooling Products faced falling sales and margins and recorded a segment loss.

Financial highlights

• Total income increased 19% YoY to Rs. 716.06 crore; sales, work bills, services and commission reached Rs. 694.74 crore.

• Operating profit (PBDIT) was Rs. 58.40 crore vs Rs. 52.59 crore; PBT was Rs. 46.59 crore vs Rs. 40.18 crore.

• PAT rose 5% to Rs. 32.55 crore from Rs. 31.04 crore; EPS increased to Rs. 18.10 from Rs. 16.79.

• Exports grew fourfold to Rs. 37.84 crore from Rs. 9.14 crore; foreign exchange earnings increased 137% to Rs. 51.20 crore.

• Operating cash flow was Rs. 20.61 crore vs Rs. 26.02 crore, with working-capital changes absorbing cash.

Outlook and guidance

• A healthy central airconditioning project backlog and continued industry momentum supported expectations of high growth in FY04/05.

• Growth priorities included capacity expansion, product innovation, channel development, exports and brand building; disciplined operating expense control remained important.

• Management expected corrective actions in Cooling Products to improve performance, with some strategic measures taking longer to benefit results.

• Commercial airconditioning market growth was forecast at 14% CAGR; commercial refrigeration growth was expected to exceed 20%.