Blue Star Limited , a leading air conditioning and commercial refrigeration company, reported a challenging first quarter, with profits declining despite a modest increase in revenue. The company's performance was significantly impacted by unseasonal rains across India, resulting in weak summer demand for room air conditioners.

Financial Performance

For the quarter ended June 30, Blue Star's consolidated revenue from operations grew by 4.1% to Rs 2,982.25 crore, compared to Rs 2,865.37 crore in the same period last year. However, the company's net profit for the quarter declined to Rs 120.82 crore from Rs 168.76 crore, representing a 28.4% decrease.

The company's operating profit (EBITDA excluding Other Income) for the quarter stood at Rs 199.99 crore, or 6.7% of revenue, down from Rs 237.83 crore (8.3% of revenue) in the previous year. This decline in profitability was primarily attributed to the weak performance of the Unitary Products segment, which includes room air conditioners.

Segment Performance

Electro-Mechanical Projects and Commercial Air Conditioning Systems

This segment showed strong growth, with revenue increasing by 35.9% to Rs 1,412.46 crore. The segment result stood at Rs 111.62 crore (7.9% of revenue), compared to Rs 103.03 crore (9.9% of revenue) in the previous year. The company witnessed robust order bookings, particularly from factories, data centers, and the healthcare sector.

Unitary Products

The Unitary Products segment, which includes room air conditioners and commercial refrigeration, experienced a revenue decline of 13.3% to Rs 1,499.37 crore. The segment result decreased to Rs 87.47 crore (5.8% of revenue) from Rs 158.03 crore (9.1% of revenue) in the previous year. This decline was primarily due to subdued demand for room air conditioners caused by unseasonal rains and a mild summer.

Professional Electronics and Industrial Systems

This segment saw a revenue decline of 27.3% to Rs 70.42 crore. The segment result was Rs 7.62 crore (10.8% of revenue), compared to Rs 9.60 crore (9.9% of revenue) in the previous year. The segment faced challenges in the Med Tech and Data Security businesses.

Outlook and Management Commentary

Despite the challenges in the first quarter, Blue Star's management remains optimistic about the company's prospects. Vir S. Advani, Chairman & Managing Director of Blue Star Limited, stated, "We anticipate the demand to revive during the upcoming festive season. Further, our well-diversified portfolio of B2B products and solutions comprising, Electro-Mechanical Projects, Commercial Air Conditioning and Commercial Refrigeration, should help us partly offset the shortfall during the rest of the financial year."

The company maintains a robust order book, which grew by 12.5% to Rs 6,843.04 crore as of June 30, compared to Rs 6,084.69 crore a year ago. This indicates a healthy pipeline for upcoming quarters.

Blue Star continues to focus on strategic investments in manufacturing, R&D, and digitalization to drive long-term growth and innovation while ensuring sustainable value creation for stakeholders.

As the company navigates through these challenging market conditions, it remains committed to leveraging its diversified portfolio and strong market position to drive recovery in the coming quarters.

Blue Star Limited , a leading air conditioning and commercial refrigeration company, is anticipating stronger demand during the upcoming holiday season, despite facing challenges in the first quarter.

Q1 Performance

The company reported a consolidated revenue growth of 4.10% to Rs 2,982.25 crores, compared to Rs 2,865.37 crores in the same period last year. However, the quarter began on a softer note due to unseasonal rains across the country, resulting in a weak summer that adversely impacted the Room Air Conditioners business.

Segment-wise Performance

Electro-Mechanical Projects and Commercial Air Conditioning Systems

This segment saw robust growth, with revenue increasing by 35.90% to Rs 1,412.46 crores. The company witnessed strong order bookings, particularly from factories, data centers, and healthcare sectors.

Unitary Products

The Unitary Products segment, which includes Room Air Conditioners and Commercial Refrigeration, experienced a revenue decline of 13.30% to Rs 1,499.37 crores. This was primarily due to the early onset of monsoon and an overall mild summer, leading to subdued demand for room air conditioners.

Professional Electronics and Industrial Systems

This segment faced challenges, with revenue declining by 27.30% to Rs 70.42 crores.

Looking Ahead

Despite the challenges in Q1, Blue Star remains optimistic about the future. The company anticipates a stronger demand revival during the festive season, particularly for its Room Air Conditioners business.

Vir S. Advani, Chairman & Managing Director of Blue Star Limited, commented on the outlook: "We anticipate the demand to revive during the upcoming festive season. Further, our well-diversified portfolio of B2B products and solutions comprising Electro-Mechanical Projects, Commercial Air Conditioning, and Commercial Refrigeration should help us partly offset the shortfall during the rest of the financial year."

Strategic Focus

Blue Star is committed to its long-term vision for growth and innovation. The company plans to make strategic investments in manufacturing, R&D, and digitalization while ensuring sustainable value creation for stakeholders.

As the holiday season approaches, Blue Star is poised to capitalize on the expected increase in demand, leveraging its diverse product portfolio and strong market presence.

Financial Highlights

With a robust order book and strategic initiatives in place, Blue Star is well-positioned to navigate the challenges and capitalize on the anticipated demand uptick in the coming months.