Blue Star share price gains 1%, trades near 52-week highs; firm volume, earnings outlook for AC producers
Blue Star share price gained 1.7% in intraday trades on Wednesday and closed with gains of almost 1%. Voltas share price also ended the day with gains of 0.16% on the BSEon a day when benchmark indices were down more than 2%.
The Air-conditioner producers (Blue Star and Voltas) and even Lloyds (Havells) are gaining regularly and trading near 52-week highs seen recently. Though festive season sales for all consumer durables generally remained soft during the quarter gone by, analysts are of the view that inventory placement ahead of peak season are likely to drive volume growth for air conditioner producers during the quarter gone by (October-December) quarter.
It is not only volumes growth outlook that keeps expectations from cooling product manufacturers high during the Q3, analysts are also positive on the earnings outlook for producers helped by lower commodity prices. Also Read- HDFC Bank share price cracks over 8% after Q3 results, erases over a lakh crore in m-cap; what should investors do? Voltas, Blue Star and Lloyds are also seeing market share gains said Research analysts as Harshit Kapadia at Elara Securities India Pvt Ltd.
We expect AC companies to see volumes growth of of 15-20% in Q3FY24, said analysts at PhillipCapital Research. Companies such as Daikin, Voltas and Blue Star saw higher primary billing.
Additionally, AC companies’ raw material costs fell 8%, which should support margins in Q3FY24, they added Other analysts also remain positive on demand trajectory in the near terms and declining costs aiding earnings performance. Also Read- Cipla share price rises 25% in six months; Strong earnings outlook beyond FY24 may aid further gains Demand tailwinds are ahead while margins bottoming out said analysts
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