Why Investors Should Choose Blue Star Ltd. ?

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Blue Star Limited is a well-established company with a strong track record in the electro-mechanical projects (EMP) and unitary products (UP) segments. The company has a strong market position and is committed to innovation and technology. Blue Star Limited's financial stability and resilience, as reflected in metrics such as residual income and economic value added, provide assurance to investors. The company's commitment to creating value for shareholders, evident in positive residual income and periods of positive Economic Value Added, aligns with investor interests.

Recent News from Blue Star

CRISIL Ratings has reaffirmed its 'CRISIL A1+' rating on the commercial paper programme of Blue Star Limited (BSL). The rating reflects BSL's strong business risk profile driven by diversity in revenue from electro-mechanical projects (EMP) and unitary products (UP) segments. The ratings factor in the strong market position of BSL in the EMP segment with a healthy order book and gradually increasing market share in the UP segment. Financial risk profile is also marked by high networth and comfortable capital structure. These rating strengths are partially offset by the working capital-intensive operations and susceptibility to cyclicality in demand from end-user industries.

Analytical Approach

For arriving at the ratings, CRISIL Ratings has consolidated the business and financial risk profile of Blue Star Ltd and its subsidiaries Blue Star Engineering and Electronics Ltd (BSEEL), Blue Star Climatech Ltd, Blue Star International FZCO, Blue Star Systems and Solutions LLC, BSL AC&R (Singapore) Pte Ltd, Blue, Blue Star North America Inc, Blue Star Europe B.V., Blue Star Innovation Japan LLC, Blue Star Qatar WLL, Blue Star Oman Electro-Mechanical Co. LLC (JV) and Blue Star M&E Engineering Sdn Bhd (JV) due to the similar nature of their operations.

Environment, Social and Governance (ESG) Profile

CRISIL Ratings believes that BSL's ESG profile supports its already strong credit risk profile. The sector has a moderate environmental and social impact, primarily driven by its raw material sourcing strategies, waste-intensive processes, and direct impact on the health and well-being of its customers.






Key ESG highlights:

  • BSL's manufacturing facilities are equipped with testing machines which use latest technology to aid in quality improvement as well as energy and water savings. This includes water harvesting facilities at its manufacturing plants and the treated water is used for flushing and local irrigation.
  • The manufacturing facilities are also equipped with Sewage Treatment Plants (STP) and Effluent Treatment Plants (ETP). The Company's Wada factory and Blue Star Innovation Centre, Thane has received IGBC Green Building Certificate under the Platinum category. And their top 100 value chain partners were assessed for environmental impacts.
  • Company is committed in ensuring safety and security of its employees. There were no complaints of sexual harassment in fiscal 2022 and the Lost time injury frequency rate (LTIFR) ratio stood at 0.13 in fiscal 2023.
  • The governance structure is characterised by effectiveness in board functioning and enhancing shareholder wealth, presence of investor grievance redressal mechanism and extensive disclosures.
  • The company is three-time winner of the Golden Peacock Award for excellence in corporate governance and 2-time winner of the Golden Peacock Award for risk management.

ESG is gaining importance among investors and lenders. BSL's commitment to ESG will play a key role in enhancing stakeholder confidence, given shareholding by foreign portfolio investors and access to both domestic and foreign capital markets.

Major Risk Involved

The company has a high level of non-cash earnings.

Accrual ratio: 41%

This is considered a major risk. Non-cash earnings can arise from many different things. However, if a company consistently has a high level of non-cash earnings, it may be a sign that they are recognizing revenue from customers before the full value of the sales are received as cash or they are not depreciating the value of their assets appropriately. These are practices that inflate earnings, while not providing a similar increase to cash flows. Companies in some select industries naturally have a high level of non-cash earnings and it is not a major concern. However, in the worst case scenario it can be an early sign of performance manipulation by management.

Currently, the following risks have been identified for the company:

  • Major Risk

High level of non-cash earnings (41% accrual ratio).

  • Minor Risks

  • Paying a dividend despite having no free cash flows.

  • Shareholders have been diluted in the past year (6.7% increase in shares outstanding).



Blue Star Limited is a strong company with a bright future. The company's diversified business model, strong market position, and commitment to innovation and technology make it.

Location: 5R66PXQ6+73

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