Blue Star's profit down by 28.4% in June quarter

Mumbai, 6 August 2025: Blue Star Limited (NSE: BLUESTARCO, BSE: 500067) posted a 4.1% year-on-year (YoY) increase in consolidated revenue to ₹2,982.25 crore for the quarter ended June 2025 (Q1FY26). However, the company’s net profit slipped by 28.4% YoY to ₹120.82 crore, primarily due to weak Room Air Conditioner (RAC) sales caused by an unseasonably mild summer and early monsoon. The sluggish demand significantly impacted its profitability, even as project-based businesses showed resilience.

Net Profit Drops 28.4% YoY to ₹120.82 Cr in Q1FY26 as Mild Summer Dampens Room AC Sales

The first quarter saw a steep decline in Blue Star’s net profit to ₹120.82 crore, compared to ₹168.76 crore in Q1FY25, marking a 28.4% YoY decrease. The drop in earnings was primarily due to a 13.3% fall in revenue from Unitary Products, largely Room ACs, which were affected by early rains and cooler temperatures. Despite strong traction in project-based businesses, the seasonal impact on RAC volumes dragged overall profitability.

Additionally, EBITDA (excluding other income) fell 15.9% YoY to ₹199.99 crore, and EBITDA margins narrowed to 6.7% from 8.3%. Finance costs also surged 31.8% YoY to ₹10.07 crore, adding further pressure to earnings.

Revenue Rises 4.1% YoY to ₹2,982.25 Cr in Q1FY26 on Strong Project and Commercial AC Demand

On a YoY basis, consolidated revenue rose from ₹2,865.37 crore to ₹2,982.25 crore, supported by robust performance in the Electro-Mechanical Projects and Commercial AC segment, which witnessed a 35.9% YoY jump in revenue to ₹1,412.46 crore.

This segment benefited from continued demand in factories, healthcare, data centres, and education. However, railway and metro infrastructure projects showed limited traction.

Room AC Segment Revenue Down 13.3% to ₹1,499.37 Cr as Seasonal Headwinds Affect Sales

Revenue from the Unitary Products division, which includes Room ACs and Commercial Refrigeration, declined by 13.3% YoY to ₹1,499.37 crore. Room AC sales were significantly hit by a milder-than-usual summer, impacting consumer demand.

Despite the decline, Blue Star managed to marginally increase its market share in the RAC space. Meanwhile, Commercial Refrigeration rebounded sharply, driven by solid demand from the processed food and pharmaceutical industries, recovering from prior regulatory issues.

Electro-Mechanical Projects Revenue Soars 35.9% to ₹1,412.46 Cr but Margins Narrow

The Electro-Mechanical Projects and Commercial AC business recorded ₹1,412.46 crore in revenue, up 35.9% YoY, backed by expansion in industrial demand. However, despite higher volumes, segment margins slipped to 7.9% from 9.9%, primarily due to a shift in project mix and subdued performance from metro and railway electrification projects.

The segment result improved to ₹111.62 crore from ₹103.03 crore YoY, showcasing operating leverage despite margin pressure.

Professional Electronics Revenue Down 27.3% YoY to ₹70.42 Cr on Weak Med Tech Demand

Blue Star’s Professional Electronics and Industrial Systems division reported a 27.3% YoY drop in revenue to ₹70.42 crore, while the segment result declined 20.6% YoY to ₹7.62 crore.

Med Tech sales were affected by regulatory uncertainty surrounding pre-owned medical equipment. However, demand for Industrial Solutions showed improvement due to growth in testing and manufacturing verticals.

Net Cash Position Slumps 64.4% to ₹370.92 Cr Despite 12.5% Rise in Order Book to ₹6,843 Cr

As of 30 June 2025, the company’s net cash position stood at ₹370.92 crore, a 64.4% YoY decline from ₹1,042.87 crore. The drop is attributed to working capital requirements and ongoing investments.

Meanwhile, the carried forward order book increased by 12.5% YoY to ₹6,843.04 crore, reflecting strong traction in project orders, especially from the private sector.

Share Price Jumps Over 2% to ₹1,786.30 on Market Recovery Hopes and Robust Order Book

Following the Q1FY26 results announcement, Blue Star shares rose 2.03% to ₹1,786.30 at 3:30 PM IST on 6 August 2025 on the NSE. The stock opened at ₹1,755.10, touched an intraday high of ₹1,825.00, and a low of ₹1,722.20. The rise in share price reflects investor optimism driven by the healthy order pipeline and management’s confidence in a demand revival during the upcoming festive season, despite short-term pressure on margins and cash flows.

Management Expects Festive Season Recovery After Weak Q1; B2B Segments to Drive Growth

Commenting on the results, Vir S. Advani, Chairman & Managing Director of Blue Star, said the company faced challenges due to unseasonal rains and muted summer temperatures, which affected RAC sales. However, he noted that the diversified B2B portfolio across Electro-Mechanical Projects, Commercial ACs, and Refrigeration continues to provide resilience.

He added that the company remains focused on investments in manufacturing, R&D, and digitalisation, and expects a pickup in demand during the festive quarter, which could offset Q1 losses.

Blue Star Ltd: India’s Leading Cooling Solutions Firm with Strong B2B Focus

Blue Star Limited, headquartered in Mumbai, is a leading player in air conditioning, refrigeration, and MEP (Mechanical, Electrical, and Plumbing) solutions, serving both B2B and B2C markets. Listed on the NSE (BLUESTARCO) and BSE (500067), the company has a growing international footprint and caters to industries such as manufacturing, healthcare, infrastructure, and hospitality through its extensive portfolio of cooling and engineering solutions.

REF:

https://nsearchives.nseindia.com/corporate/BLUESTARCO_06082025153607_Pressrelease06082025.pdf

https://nsearchives.nseindia.com/corporate/BLUESTARCO_06082025152105_BSLBMOutcome06082025.pdf

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