Jefferies downgrades Blue Star but here are its top picks within consumer durables

Global brokerage firm Jefferies has downgraded shares of Blue Star Ltd. to ‘Hold’ from its earlier rating of ‘Buy’. The brokerage has a price target of ₹2,340 per share, indicating a potential upside of 5% from the stock’s closing levels on Monday.

The foreign brokerage cited limited upside potential after the stock surged 140% in Calendar Year 2024.

Currently, Blue Star is trading at 60 times its FY26 estimated earnings, well above its five-year average PE (price-to-earnings) ratio of 41 times.

For the fourth quarter of FY25, demand growth is expected to exceed 25%. Jefferies has raised its FY26-27 EPS estimates by 5-6% and assigned a target PE of 52x, reflecting a 25% premium over the historical five-year average.

Discretionary segment outlook

According to Jefferies’ channel checks, rural demand is improving slowly, but urban demand remains weak due to inflationary pressures.

The foreign brokerage also said that it has a ‘Buy’ rating on V-Guard, Polycab, Voltas, and Crompton. Jefferies has a ‘Hold’ recommendation on Havells on weakness in core business in the first half and concerns over Lloyd’s profitability). The brokerage has an Underperform rating on Whirlpool due to margin weakness and unfavorable risk-reward.

Shares of Blue Star Ltd. are currently trading 3% lower at ₹2,157.75. The stock has rallied nearly 130% over the last 12 months.