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

This presentation by Ashok M. Advani, Chairman & Managing Director of Blue Star, provides insights into the company's performance and future outlook. Blue Star, India's leading HVAC and commercial refrigeration company, showcases its financial highlights, achievements in FY07, and business segments including central air conditioning, cooling products, and service operations. Noteworthy points include a consistent profit record, strategic partnerships, and growth potential in various markets. The company aims to leverage opportunities in the booming construction and retail sectors through innovative technologies and customer-focused services.

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

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

  2. Agenda • About Blue Star • Financial Highlights • Business Highlights • Construction boom • Retail boom and cold chain • Outlook

  3. About Blue Star

  4. Introduction • Blue Star is India’s 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. Blue Star today

  6. Market Capitalisation (Rs crores) - -

  7. Financial Highlights

  8. Blue Star Financial Performance (Rs crores)

  9. Key Ratios

  10. Carry Forward Order Book (Rs. crores)

  11. Total Income (Rs crores) CAGR = 30.9%

  12. Profit After Tax (Rs crores) CAGR = 29.8%

  13. Return on Capital Employed

  14. Return on Shareholders’ Funds

  15. Rs. Earnings Dividend (* Face value Rs 2.00 per share. Previous years’ figures on a like-to-like basis) Earnings Per Share & Dividend Per Share

  16. 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. Institutional Investor Holding

  18. Business Highlights

  19. 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. 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. Business Segments • Central and Packaged Airconditioning Systems • Cooling Products • Professional Electronics and Applied Industrial Systems

  22. 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. Central and Packaged Airconditioning Systems – Revenue (Rs crores) CAGR = 32.8%

  24. Central and Packaged Airconditioning Systems – Segment Result (Rs crores) CAGR = 30.2%

  25. 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

  26. 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. Cooling Products – Revenue (Rs crores) CAGR = 30.3%

  28. Cooling Products – Segment Result (Rs crores)

  29. Service Business • Blue Star is India’s 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. Product Portfolio

  31. Product Portfolio

  32. Product Portfolio

  33. 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. 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. Exports - Revenue (Rs crores)

  36. 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. Professional Electronics & Applied Industrial Systems – Revenue (Rs crores) CAGR = 27.6%

  38. Professional Electronics & Applied Industrial Systems – Segment Result (Rs crores) CAGR = 22.6%

  39. Construction boom

  40. 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. 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. 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. Opportunities from Telecom Segment • Blue Star’s 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. 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. 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. Retail boom and cold chain

  47. Retail Revolution: Where?

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

  49. Large-scale Super Market Investments Planned

  50. Retail Format Airconditioning Refrigeration % Investment Investment Format Per Store Per Store Hyper Market (100,000 sq.ft.) Rs.200 lakhs Rs.150 lakhs 4% Super Market (20,000 sq.ft.) Rs. 32 lakhs Rs. 30 lakhs 16% Convenience Store (2500sq.ft.) Rs. 4 lakhs Rs. 6 lakhs 80% Distribution CentresOne for every 50 stores Rs.100 lakhs Bulk StoragesMany Transport Refrigeration UnitsMany Supermarkets will drive cold chain…

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