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ANALYST MEET Presentation by Ashok M Advani, Chairman & Managing Director May 28, 2007.

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Presentation on theme: "ANALYST MEET Presentation by Ashok M Advani, Chairman & Managing Director May 28, 2007."— Presentation transcript:

1 ANALYST MEET Presentation by Ashok M Advani, Chairman & Managing Director May 28, 2007

2 Analyst Meet May 28, 2007 Agenda About Blue Star Financial Highlights Business Highlights Construction boom Retail boom and cold chain Outlook

3 Analyst Meet May 28, 2007 About Blue Star

4 Analyst Meet May 28, 2007 Introduction Blue Star is Indias largest central airconditioning and commercial refrigeration company Founded by Mohan T Advani in 1943 Listed on Bombay Stock Exchange in 1969 Only 50 Indian companies listed on BSE are more than 60 years old- Blue Star is one of them Professionally managed; largest pool of HVAC engineers in the country Focused on corporate, commercial, and institutional customers Unbroken record of profits and dividend payment

5 Analyst Meet May 28, 2007 Blue Star today Total IncomeRs 1607 crores Net ProfitRs 71 crores Employees2181 Manufacturing Plants4 (plus 1 under construction) Offices23 Dealers680

6 Analyst Meet May 28, 2007 Market Capitalisation (Rs crores) --

7 Analyst Meet May 28, 2007 Financial Highlights

8 Analyst Meet May 28, 2007 Blue Star Financial Performance Total Income Growth over previous year % % Operating Profit (PBDITA) excl Non-operating income Growth over previous year % % Profit Before Tax Growth over previous year % % Profit After Tax Growth over previous year % % Shareholders Funds Borrowings Capital Employed Operating Cash Flow (Rs crores)

9 Analyst Meet May 28, 2007 Key Ratios Gross Margin (excl. Non operating Income)22.40%22.80% Operating Margin (excl. Non operating Income)7.30%7.40% Return on Capital Employed32.1%30.1% Return on Shareholders' Funds33.4%28.3% Earnings Per Share (Rs.) Dividend Per Share (Rs.) Capital Turnover Debt/Equity Inventory Turnover Receivables (Days Billings Outstandings)8074

10 Analyst Meet May 28, 2007 Carry Forward Order Book SegmentMarch 06March 07Growth Central Airconditioning % Cooling Products % Professional Electronics497451% TOTAL % (Rs. crores)

11 Analyst Meet May 28, 2007 Total Income CAGR = 30.9% (Rs crores)

12 Analyst Meet May 28, 2007 Profit After Tax CAGR = 29.8% (Rs crores)

13 Analyst Meet May 28, 2007 Return on Capital Employed

14 Analyst Meet May 28, 2007 Return on Shareholders Funds

15 Analyst Meet May 28, 2007 Earnings Per Share & Dividend Per Share (* Face value Rs 2.00 per share. Previous years figures on a like-to-like basis) Earnings Dividend Rs.

16 Analyst Meet May 28, 2007 Shareholding Pattern (as on March 31, 2007) 40.30% Promoters 37.65% Indian Public 8.39% Financial Institutions/Banks/ Mutual Funds 8.44% FII holdings 5.22% Bodies Corporate

17 Analyst Meet May 28, 2007 Institutional Investor Holding

18 Analyst Meet May 28, 2007 Business Highlights

19 Analyst Meet May 28, 2007 Blue Star Differentiators Focused on corporate and commercial customers Differentiated products and value added services Technical, engineering and contracting expertise Employees and business partners tuned to customer oriented specialist/expert culture Delivering a world-class customer experience Value-driven work ethics

20 Analyst Meet May 28, 2007 Achievements in FY07 Consolidation of leadership in central and packaged airconditioning segment Over 150 Blue Star screw chillers installed and commissioned Dominated the telecom shelter airconditioning business with over 50% market share Volumes of split airconditioners grew 75% Tie-up with ISA, Italy for supermarket refrigeration equipment Several new customer accounts in the cold chain business

21 Analyst Meet May 28, 2007 Business Segments 1.Central and Packaged Airconditioning Systems 2.Cooling Products 3.Professional Electronics and Applied Industrial Systems

22 Analyst Meet May 28, 2007 Central and Packaged Airconditioning Systems Design, manufacturing, installation, commissioning and maintenance of large central airconditioning plants Wide range of chillers, air handling units and fan coil units Comprehensive range of packaged airconditioning systems Energy efficiency as the technology platform; pioneers of products which save power

23 Analyst Meet May 28, 2007 Central and Packaged Airconditioning Systems – Revenue (Rs crores) CAGR = 32.8%

24 Analyst Meet May 28, 2007 Central and Packaged Airconditioning Systems – Segment Result (Rs crores) CAGR = 30.2%

25 Analyst Meet May 28, 2007 Opportunities from National Accounts 40% of central airconditioning revenues from National/Major Account customers All of them have significant growth potential Blue Star expected to garner a major portion of the HVAC requirement from these customers RelianceFuture DLFShoppers Stop InfosysSatyam Café Coffee DayWipro HCLICICI HutchRMZ HDFCRaymonds HSBCPVR Moser BaerDr Reddys MicrosoftBharati

26 Analyst Meet May 28, 2007 Cooling Products Comprises –Room Airconditioners –Commercial Refrigeration Products & Systems Wide range of window and split airconditioners Comprehensive range of commercial refrigeration equipment –Cold Chain equipment –Deep Freezers –Water Coolers / Bottled Water Dispensers –Bottle/ Milk Coolers Contemporary products with power saving design

27 Analyst Meet May 28, 2007 Cooling Products – Revenue (Rs crores) CAGR = 30.3%

28 Analyst Meet May 28, 2007 Cooling Products – Segment Result (Rs crores)

29 Analyst Meet May 28, 2007 Service Business Blue Star is Indias largest AC&R service provider Maintains over 1.5 million TR of equipment 25,000 customers Service Portfolio includes System maintenance Spare Parts Energy Management Air Management Water Management Upgrades/Enhancements/Revamp/Retrofit Remote Monitoring Integrated Engineering Facilities Management Services

30 Analyst Meet May 28, 2007 Product Portfolio

31 Analyst Meet May 28, 2007 Product Portfolio

32 Analyst Meet May 28, 2007 Product Portfolio

33 Analyst Meet May 28, 2007 Manufacturing Specialize in manufacturing a variety of highly engineered and custom-built products High level of product development capabilities Over 225 models manufactured across 25 product lines Lean manufacturing and world-class practices Globally competitive Capacity expansion underway in line with growth

34 Analyst Meet May 28, 2007 Exports Exporting water coolers for over five decades Window and split ACs for high ambient temperature conditions have been well received in the Middle East and Iraq Customised ducted systems and heat pumps for the Middle East and Europe Central airconditioning products such as AHUs and FCUs also exported Opened office in Doha recently for project and product requirements from the region

35 Analyst Meet May 28, 2007 Exports - Revenue (Rs crores)

36 Analyst Meet May 28, 2007 Professional Electronics & Applied Industrial Systems Import-Distribution of professional electronic equipment from world-renowned manufacturers Wide range of complex, hi-tech and large value equipment in –Medical Electronics –Material Testing Equipment and Systems –Data Communication Products and Systems –Test and Measuring Instruments –Analytical Instruments –Industrial Products and Systems Catering to Healthcare, Manufacturing, R&D, Quality Control, Petrochemicals, Banking etc

37 Analyst Meet May 28, 2007 Professional Electronics & Applied Industrial Systems – Revenue (Rs crores) CAGR = 27.6%

38 Analyst Meet May 28, 2007 Professional Electronics & Applied Industrial Systems – Segment Result (Rs crores) CAGR = 22.6%

39 Analyst Meet May 28, 2007 Construction boom

40 Analyst Meet May 28, 2007 Trends Construction boom driven by IT/ITES, Retail and Infrastructure projects Major growth plans announced by several players in these segments Special Economic Zones (SEZs) are also expected to drive growth The above trends will translate into significant airconditioning and even refrigeration opportunities

41 Analyst Meet May 28, 2007 IT/ITES IT/ITES services expected to grow in excess of 25% per annum over the next 3 years An estimated 1.4 million people will be added till FY10 Office space of over 100 million sq ft will be needed Translates into airconditioning requirement of over Rs 1500 crores Blue Star enjoys a preferred partner status with Infosys, HP, Satyam, Wipro, HCL, Cognizant, Microsoft - major players driving growth

42 Analyst Meet May 28, 2007 Retail, Malls & Multiplexes Based on plans announced by major players, 150 million sq feet of space will be added Translates into an airconditioning requirement of over Rs 2250 crores In addition, multiplexes expected to add 700 screens over the next 3 years Blue Star enjoys strong relationships with Reliance, Pantaloon, Shoppers Stop, Bharati, DLF, RPG, PVR, Adlabs and Vishal Megamart - main players driving growth

43 Analyst Meet May 28, 2007 Opportunities from Telecom Segment Blue Stars telecom business for airconditioning cell sites grew 185% in FY07 Blue Star enjoys a dominant 50% market share Subscriber base expected to double over the next 3 years to 500 million necessitating 150,000 additional cell sites Translating into an airconditioning opportunity of Rs 1000 crores

44 Analyst Meet May 28, 2007 Opportunities from Industrial Segment XI Fifth year plan includes addition of 48,000 MW of thermal power Blue Star has already executed major power plant projects for NTPC, NPCIL and Jindal Blue Star expects significant power plant project orders in the medium term Another fast-growing segment is pharma Blue Star has strong credentials and expertise in the pharma segment as well

45 Analyst Meet May 28, 2007 Contracting Opportunities The construction boom will fuel growth in HVAC contracting business Currently, 15% of mega projects involve integrated mechanical, electrical and plumbing contracting Blue Star has developed capabilities in this area

46 Analyst Meet May 28, 2007 Retail boom and cold chain

47 Analyst Meet May 28, 2007 Retail Revolution: Where? Home needs Super market chains (Reliance/Hypercity etc.) Eateries Branded/Formatted Chains (Café Coffee Day, McDonalds etc.) Luxury Goods Malls with multiple brand outlets & Stand alone chains

48 Analyst Meet May 28, 2007 The Cold Chain Production Logistics Retail Sales to Consumer Bulk Usage by Eateries & Restaurants Exports Driver = Super Markets Driver = Increasing eat-out culture Driver = Entry of Corporates

49 Analyst Meet May 28, 2007 Name of the CompanyPlanned InvestmentLikely foreign partner Reliance RetailRs.25,000 Cr. over 5 yrsDirect Bharti RetailRs.20,000 Cr. over 5 yrsWal Mart Aditya Birla RetailRs.15,000 Cr. Over 5 yrsDirect Food WorldRs. 1,000 Cr over 2 yrsAlready present in India SpencersRs. 1,000 Cr. Over 2 yrsDirect Vishal Mega MartRs.1,250 Cr. over 4 yrsDirect Hyper CityRs.1,200 Cr. over 4 yrsHome Retail Group Total (approx)Rs.60,000 Cr. + Large-scale Super Market Investments Planned

50 Analyst Meet May 28, 2007 Retail FormatAirconditioning Refrigeration% Investment Investment Format Per Store Per Store Hyper Market (100,000 sq.ft.)Rs.200 lakhsRs.150 lakhs4% Super Market (20,000 sq.ft.)Rs. 32 lakhsRs. 30 lakhs16% Convenience Store (2500sq.ft.) Rs. 4 lakhsRs. 6 lakhs80% Distribution Centres One for every 50 storesRs.100 lakhs Bulk Storages Many Transport Refrigeration Units Many Supermarkets will drive cold chain…

51 Analyst Meet May 28, 2007 Supermarkets Business Opportunities - Expectations (4 year period commencing April 2007) Total investment Rs 60,000 Cr. AC Potential Rs 3000 Cr Blue Star Share Rs.900 Cr Front end Refrigeration Potential Rs 1500 Cr. Blue Star Share Rs.250 Cr Back end Refrigeration Potential Rs 1500 Cr. Blue Star Share Rs.500 Cr.

52 Analyst Meet May 28, 2007 Outlook

53 Analyst Meet May 28, 2007 Outlook The macro economic trends are favourable Blue Star in a strong position to leverage the opportunities available All three lines of business performing well The Company is poised to outperform the market growth

54 Analyst Meet May 28, 2007 Thank You


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