Presentation is loading. Please wait.

Presentation is loading. Please wait.

ANALYST MEET February 25, 2008 ANALYST MEET February 25, 2008.

Similar presentations


Presentation on theme: "ANALYST MEET February 25, 2008 ANALYST MEET February 25, 2008."— Presentation transcript:

1 ANALYST MEET February 25, 2008 ANALYST MEET February 25, 2008

2 Analyst Meet Feb 25, 2008 About Blue Star

3 Analyst Meet Feb 25, 2008 About Blue Star Blue Star is an end-to-end solutions provider in the field of airconditioning and commercial refrigeration as a Manufacturer Contractor After-sales service provider Another business interest is distribution and maintenance of professional electronics and industrial systems

4 Analyst Meet Feb 25, 2008 About Blue Star Specialist organisation, deliberately tuned to satisfy the needs of corporate, commercial and institutional customers Differentiated products and expert solutions As market leaders, it often sets the standards for products, practices and services Has successfully adapted itself to leverage on opportunities in emerging segments

5 Analyst Meet Feb 25, 2008 Blue Star today Total Income (9 months ended Dec 31, 2007) Rs 1526 crore Net Profit (9 months ended Dec 31, 2007) Rs 104 crore Market CapitalisationRs 4275 crore Employees2400 Manufacturing Plants4 (plus 1 under construction) Number of products manufactured Over 250 models in 25 product lines

6 Analyst Meet Feb 25, 2008 Blue Star today Customers25,000 Installed Base4 million TR Exclusive Sales & Service Dealers700 Subcontractors and Associates800 Indirect Manpower Deployed22,000

7 Analyst Meet Feb 25, 2008 Q3 Financial Performance 9-months ended Dec 31, 2007 9-months ended Dec 31, 2006 GrowthYear ended March 31, 2007 Total Income (Rs crore) 1526106044%1607 Operating Profit (Rs crore) 16272125%117 Operating Margin10.6%6.8%56%7.0% Net Profit (Rs crore) 10437181%71 Net Profit Margin6.8%3.5%94%4.4% Earnings per share (Face Value = Rs 2) (Rs) 11.534.13179%7.91

8 Analyst Meet Feb 25, 2008 Business Model BusinessBusiness Model Central AirconditioningManufacturer; Contractor; After-sales service provider Packaged AirconditioningManufacturing and Marketing through channel partners; After-sales service provider Telecom Shelter Airconditioning Manufacturing and Marketing; After-sales service provider Room AirconditionersManufacturing and Marketing through channel partners; After-sales service provider Cold Chain products and systems Manufacturing and Marketing through channel partners; After-sales service provider AC&R ServiceStandard Services; Value added service products, Revamp and upgrades Professional Electronics & Industrial Systems Value added reseller; System integrator; Agency operations

9 Analyst Meet Feb 25, 2008 Target Segments BusinessTarget Segments Central AirconditioningInfrastructure; IT/ITES; Office Complexes; Retail; Healthcare; Hospitality Packaged AirconditioningRetail; Medium Corporate and Commercial establishments Telecom Shelter AirconditioningTelecom service providers; Passive infrastructure providers Room AirconditionersSmall/Medium Corporate and Commercial establishments; High-end Residential Cold Chain products and systems Agriculture; Ice Cream; Hospitality; Supermarkets; Processed Foods; Pharma AC&R ServiceInstalled base of Blue Star customers Professional Electronics & Industrial Systems Manufacturing; Defense; Industrial; Healthcare; Banking

10 Analyst Meet Feb 25, 2008 Growth Drivers BusinessGrowth Drivers Central AirconditioningConstruction boom and huge investments in infrastructure development Packaged AirconditioningConstruction boom; expansion of medium corporate and commercial establishments Telecom Shelter AirconditioningExpansion of telecom network Room AirconditionersExpansion of small/medium corporate and commercial establishments Cold Chain products and systemsRetail boom; Govt focus on developing cold chain infrastructure; sharp growth in agri exports and processed food industry; emergence of cold chain logistics players AC&R ServiceInstalled base growth in all the Divisions of the Company; emphasis on energy efficiency and indoor air quality; replacement market; Professional Electronics & Industrial Systems Industrial and economic boom

11 Analyst Meet Feb 25, 2008 Competitive Advantages Technical Competence Credentials of over six decades Vast pool of talented engineers Turnkey solutions Energy Efficient and differentiated products Wide network and reach Strong Relationships with national/repeat customers Domain expertise

12 Analyst Meet Feb 25, 2008 Margin Improvement Substantial operating margin improvement over the last few years - from 4.2% in Q1FY05 to 10.6% in Q3FY08 Increase in margins can be attributed to –Scale –Product Mix –Value Engineering –Procurement Efficiency –Customs Duty Reduction –Higher Price Realisation due to differentiated products, value-added offerings and brand equity –Selectively pursuing high margin projects –Himachal Plant Tax benefits –Low interest costs due to lean balance sheet, sound working capital management and low borrowings –Tight control on operating expenses (Headcount up by only 30%, while Total Income has nearly tripled in the last four years)

13 Analyst Meet Feb 25, 2008 Human Resource Management Take pride in employing the largest pool of talented engineers in the country Two-thirds of employees are white collared Over 1500 engineers/professionals Attrition under control at less than 15% Grooming, mentoring, training and development to make the employee practice the Blue Star Way Customised management development programmes for senior managers

14 Analyst Meet Feb 25, 2008 Business Outlook

15 Analyst Meet Feb 25, 2008 Unprecedented growth in construction driving AC&R and Building Electrification industry

16 Analyst Meet Feb 25, 2008 Airconditioning Opportunities (non-residential) over the next 5 years (cumulative) SegmentSize/Total Investment value TR of Airconditioning (TR in millions) Value of Airconditioning (Rs crore) IT/ITES300 million sq ft1.204800 Telecom370,000 cell sites0.502200 PharmaInv Rs 300 bn0.402500 Bio-TechInv Rs 125 bn0.15600 HealthcareInv Rs 1800 bn0.402000 Electronic hardware Inv Rs 465 bn0.402000

17 Analyst Meet Feb 25, 2008 Airconditioning Opportunities (non-residential) over the next 5 years (cumulative) SegmentSize/Total Investment value TR of Airconditioning (TR in millions) Value of Airconditioning (Rs crore) Hospitality140 luxury hotels + Restaurants 0.201000 AirportsInv Rs 243 bn1.203000 MetroInv Rs 667 bn0.402000 RetailInv Rs 800 bn2.5010000 SEZsInv Rs 3500 bn1.507500 TOTAL37600 (* Source : Internal Market Research through Feedback Marketing)

18 Analyst Meet Feb 25, 2008 Airconditioning Opportunities (non-residential) over the next 5 years Rs 37,600 crore of airconditioning potential over next 5 years as against Rs 12,000 crore of airconditioning in the last 5 years Blue Star can participate with –Own manufactured products such as chillers, AHUs, FCUs, packaged ACs, VRF etc –Contracting –After-sales service Equal amount of potential is available for building electrification and MEP offerings

19 Analyst Meet Feb 25, 2008 Building Services Contract Value Airconditioning50% Electricals40% Plumbing10%

20 Analyst Meet Feb 25, 2008 HVAC Orders bundled as MEP FY08FY12 HVAC orders bundled as MEP Stand-alone HVAC orders HVAC orders bundled as MEP Stand-alone HVAC orders Market Size Rs 5,000 crore Market Size Rs 12,500 crore

21 Analyst Meet Feb 25, 2008 Blue Star Growth Agenda Aggressively grow core businesses of central airconditioning and commercial refrigeration Retain market leadership Enter building electrification business Grow integrated MEP contracting business Pursue inorganic growth opportunities

22 Analyst Meet Feb 25, 2008 Reasons for acquistion MEP turnkey projects expected to grow from current 10% to 30% over the next five years Offer integrated solutions to our strong customer segments Ramp up time in organic growth would have been too long – may have resulted in significant opportunity loss Prudent to grow inorganically and leverage on the opportunities in the construction boom

23 Analyst Meet Feb 25, 2008 Naseer Electricals Overview

24 Analyst Meet Feb 25, 2008 About Naseer Electricals Founded by A S Dawood in 1978 Headquartered in Bangalore with branches in Chennai and Hyderabad Business model revolves around providing building electrical contracting services – right from design to execution Pre-dominantly a South India player Focused on commercial buildings

25 Analyst Meet Feb 25, 2008 About Naseer Electricals Turnover Rs 107 crore (FY07) Order book Rs 90 crore Margins equivalent to central airconditioning 120 professionally qualified and highly skilled employees 1000+ contract labourers Executed several prestigious projects Strong long term relationships with its customers and influencer segments

26 Analyst Meet Feb 25, 2008 Details of Acquisition

27 Analyst Meet Feb 25, 2008 Consideration Slump Sale - Acquisition of the businesses of Naseer Electricals as a going concern Consideration upto Rs 42 crore includes –Upfront Payment –Debt –Escrowed amount on fulfilment of certain conditions

28 Analyst Meet Feb 25, 2008 Scaling up operations Naseer Electricals is primarily functional in the Southern Region Initial thrust to ramp up the business in other regions Blue Star will also begin cross-selling Electrical Contracting services to its existing HVAC customers and vice versa Will also pursue bidding for MEP jobs

29 Analyst Meet Feb 25, 2008 Rolastar Divestment Blue Star embarked on a programme to modernise site practices a decade ago Pioneered factory made ducting by setting up Rolastar with a 49% stake Being a non-core activity, Blue Star has divested 29% stake for Rs 36.75 crore Balance 20% to be sold before Sep 2009 for a price to be determined then

30 Analyst Meet Feb 25, 2008 Blue Star Design & Engineering Provides outsourced design and drafting services to HVAC & Architectural consultants and contractors in the UK, Europe and Middle East Currently employs over 100 engineers in its Mumbai facility Blue Star Limited has 50% equity ownership In the process of inducting a Strategic Partner into the business to scale the business With the Strategic Investor in place, we are confident that our investment in BSDE will yield handsome returns in the coming 2-3 years

31 Analyst Meet Feb 25, 2008 Scheme of Arrangement The exercise is to reflect the operating profits of the Company i.e. earnings in the normal course of the business Any one time items / non operational items / items that are not in the normal course of the business not to effect the operational results of the Company The Company has recently acquired the business of Naseer Electrical Private Limited (NEPL)

32 Analyst Meet Feb 25, 2008 Scheme of Arrangement The Company has filed the Scheme in the Bombay High Court which envisages the following items as exceptional and non-recurring that should not impact the operational results of the Company: Any Goodwill that may arise on account of the acquisition of the electrical contracting business. Any payments to the advisors to this new business to stabilize the operation and ensure smooth integration of the same to Blue Star culture; Any other exceptional items not pertaining to the business operations of the Company.

33 Analyst Meet Feb 25, 2008 Thank You


Download ppt "ANALYST MEET February 25, 2008 ANALYST MEET February 25, 2008."

Similar presentations


Ads by Google