Blue Star's December’12 quarter performance got a boost with EMP (electro-mechanical projects) and PAC segment seeing a growth of 7.6% and 5.36% respectively. This is positive for the company that had seen pressure on these segments in the past. The two combined contribute around 60-65% of the overall revenues. Thus company’s net sales at Rs 593.02 crore could grow 1.67% year-on-year and 3.41% sequentially.
It was heartening to see Earnings before Interest Tax depreciation and amortization (EBIDTA) in the green compared to operating loss of Rs 16.91 crore in the year ago quarter. The EBIDTA for the quarter at Rs 25.43 crore grew 26.2% sequentially while margins grew 77 bps.
This led the bottom-line too come in the green. The company posted net Profits of Rs 5.37 crore against a net loss of Rs 33 crore in the year ago quarter. However increased interest costs led net profits decline 26.13% on sequential basis
With growth on the topline improving profitability as well growth in EMP and PAC segments analysts at Microsec securities have a BUY on the stock. As per them stock trading at Rs 178 is trading at P/E of 27.3xFY13E earnings.
