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Blue Star FY06 Net Sales grows 28% to Rs 1175 crores. Declares 120% Dividend and 5 for 1 stock split.

FY06 Performance

Central airconditioning and commercial refrigeration major Blue Star has reported Net Sales of Rs 1174.56 crores for the year ended March 31, 2006, representing 28% growth over last year. Net Profit grew 25% to Rs 48.90 crores, while Earnings Per Share increased to Rs 27.18 from Rs 21.77.

Total Income for the year grew 27% to Rs 1178.62 crores.

Q4 FY06 Performance

For the quarter ended March 31, 2006, the Company reported Net sales of Rs 398.16 crores representing 27% growth over the corresponding quarter in the previous year. Total Income for the quarter at Rs 399.97 crores was up by 25%.

Net profit for the quarter increased 21% over the same period last year to Rs 25.36 crores.

Dividend

The Directors have recommended a dividend of Rs. 12 per share compared to Rs 10 per share declared last year. The Company has paid attractive dividends consistently for the past 37 years, since its listing on the Bombay Stock Exchange in 1969.

Stock Split

The shares of the Company have a record of providing high returns, and in recent times the market price has grown substantially. In order to improve liquidity, the Board has recommended a stock split with each Rs 10 share being divided into 5 shares of face value Rs 2 each.

Operating Margins

Operating profit (PBIDT excluding Other Income) for the year at Rs 86.68 crores showed an increase of 50% over Rs 57.85 crores earned in FY05. The operating margin improved to 7.4% in FY06 vs 6.3% achieved in FY05.

Segment-Wise Performance

Blue Star performed impressively in all 3 lines of business.

The large central airconditioning business accounting for 70% of total revenues continued to show healthy growth of 26% during the FY06. The IT/ITES and Retail segments were the big growth drivers helping the Company to maintain market leadership in the Indian market.

The cooling products business also registered impressive growth, increasing 32% during Q4FY06 and 29% for the whole year. The growth was driven by increased sales of window and split airconditioners as well as refrigeration products and systems such as deep freezers, water coolers and cold storages. Segment profit spurted by 206% in the year.

The professional electronics business continued to contribute significantly to the profitability of the Company. The business grew by a solid 36% during FY06.

Orders Booked During Q4FY06

The Company bagged several prestigious airconditioning project orders during the quarter ended March 31, 2006 including orders from RMZ Infinity Tower, Bangalore; Big Bazaar, Hyderabad; Satyam, Secunderabad; DRDO Panagarh, West Bengal; DLF Aamex, Gurgaon; Sahara Hospital, Lucknow; Wakefield IT Park, Pune and Globsyn Crystals, Kolkata. Apart from these, during the quarter, the Company continued to receive business from national customers such as Café Coffee Day, Kotak Mahindra and Vishal Mega Mart.

Outlook

Ashok M Advani, Chairman & Managing Director says "Blue Star's focus on profitable growth in its core businesses as well as the sustained buoyancy in the economic environment has contributed to the impressive financial performance of the Company. Our all-India network combined with the value proposition of energy efficiency, system design expertise and after-sales service excellence, has helped us to grow beyond the industry growth rates and maintain our market leadership. With a healthy order backlog, I am optimistic about the business outlook of the Company."

For additional information, please contact: B Thiagarajan, Vice President, Airconditioning and Refrigeration Service, Blue Star Limited, Bandbox House, 254D, Dr Annie Besant Road, Worli, Mumbai - 400 030, email: bthiagarajan@bluestarindia.com, Telephone: 66544000

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