Check Before You Invest : Blue Star Ltd

Snapshot

Q.1 Which industry/sub-sector does Blue Star Ltd belong to?

Blue Star Ltd belongs to the Consumer Durables sector, operating specifically within the Air Conditioners segment.

Q.2 Is Blue Star Ltd a good quality company?

Blue Star Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Blue Star Ltd undervalued or overvalued?

Blue Star Ltd appears Overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Blue Star Ltd a good buy now?

Blue Star Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Blue Star Ltd?

Blue Star Ltd revenue growth is 25.9% for FY-2025, which is above its 5-year CAGR of 18.8%, indicating faster growth.

Q.2 Return on capital employed (ROCE) of Blue Star Ltd?

Blue Star Ltd Return on capital employed is 23.67% for FY-2025, which is in line with its 5-year historical median of 23.67%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.3 Return on Asset of Blue Star Ltd?

Blue Star Ltd Return on Asset is 6.99%, which is in line with its 5-year historical median of 6.68%, indicating stable asset utilization efficiency.

Q.4 Return on Equity (ROE) of Blue Star Ltd?

Blue Star Ltd Return on equity is 18.09% for FY-2025, which is in line with its 5-year historical median of 18.09%, indicating the business is making similar use of its shareholders capital.

Q.5 Cash conversion cycle of Blue Star Ltd?

Blue Star Ltd Cash conversion cycle is 25 days, above its 5-year historical median of 24 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	1.63	1.63
ROE	18.09	18.09
ROCE	23.67	23.67
Cash Conversion Cycle	25 days	24 days

Q.6 Gross Profit margin of Blue Star Ltd?

Blue Star Ltd Gross profit margin which is the profit after deduction of direct costs, is 6.6% for FY-2025, which is above its 5-year median of 5.6%, indicating increasing margins.

Q.7 Operating Profit Margin of Blue Star Ltd?

Blue Star Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 6.45% for FY-2025, which is in line with its 5-year median of 6.2% indicating stable margins.

Q.8 Net Profit Margin of Blue Star Ltd?

Blue Star Ltd Net Profit Margin is 4.28% for FY-2025, is in line with with its 5-year median of 4.08%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin	6.6	5.6
Operating Profit Margin	6.45	6.2
Net Profit Margin	4.28	4.08

Q.9 Debt to Equity ratio of Blue Star Ltd?

Blue Star Ltd Debt-to-Equity ratio is 0.11, which is lower with the industry average of 0.24, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Blue Star Ltd?

Blue Star Ltd Debt to cash flow from operations is 0.48, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Blue Star Ltd?

Promoters hold 36.49% of the Blue Star Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Blue Star Ltd vs industry peers?

Blue Star Ltd revenue CAGR is 18.80%, compared to the industry median CAGR of 16.91%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	25.9	16.9
Gross Profit Growth	31.6	16.4
Operating Profit Growth	23.2	18.7
Net Profit Growth	31.8	20.9

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	1.63	1.29
ROE	18.09	13.87
ROCE	23.67	18.34
Cash Conversion Cycle (days)	25.17	19

Valuation & price assessment

Q.1 Stock return of Blue Star Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 24.2% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	24.2%	34.2%	35.9%	6.6%

Q.3 Valuation ratios of Blue Star Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	97.67	75.43	77.87
Price to Book	12.8	11.52	7.21
Price to Sales	3.16	2.40	2.40
EV to EBITDA	49.6	37.36	37.23

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