Blue Star (BLSTR IN) – Initiating Coverage – Capturing India’s Massive Cooling Opportunity – BUY
Published on 02 Jul 2026
We initiate coverage on Blue Star (BLSTR) with ‘BUY’ rating and SoTP-based TP of INR1,873, implying 44x FY28E P/E, given its strong earnings visibility, improving profitability and leadership across the heating, ventilation and air conditioning (HVAC) industry. BLSTR is one of India's leading air conditioning and commercial refrigeration companies, with a diversified presence across room air conditioners (RAC), commercial air conditioners (CAC), electro-mechanical projects (EMP), commercial refrigeration and industrial solutions. The company is well positioned to capitalize on India's structural cooling demand, supported by 1) rising RAC penetration and market share gains; 2) leadership in CAC and EMP; 3) timely expansion of manufacturing capacity through the Sri City facility; and 4) emerging opportunities from data center expansion and infrastructure development. We expect revenue/EBITDA/PAT to grow at 18.9%/22.9%/24.9% CAGR over FY26-28E, driven by sustained demand across both the Unitary Cooling Products (UCP) and EMP businesses, higher capacity utilization and operating leverage. Initiate with ‘BUY’.
