Blue Star (BLSTR IN) – Q1FY27 Result Update – Input cost pressures weigh on margins – Downgrade to ‘ACCUMULATE’
Published on 07 Aug 2026
UCP margins remained under pressure in Q1FY27 due to unprecedented commodity cost inflation, INR depreciation, delayed onset of summer, inventory overhang in the channel and higher spending on advertising, trade schemes and consumer finance to support tertiary sales. Management reiterated that the strategy in Q1 was to protect market share despite margin pressure. We have downward revised our FY27E/FY28E earnings by 10.1%/4.8%, factoring in lower UCP margins amid elevated input costs, higher competitive intensity. We estimate FY26-28E revenue/EBITDA/PAT CAGR of 17.8%/19.4%/26.3%. we revise our SOTP-based TP to INR1,653 (earlier INR1,873), implying PE of 40x FY28E. Downgrade to ‘Accumulate’ from ‘BUY’
