Mumbai-based air-conditioning firm Blue Star Limited sees a 15.1% drop in net profit in its first quarter, influenced by rising input costs and a delayed summer, even as revenue and order book grow.
Blue Star Limited reported a softer first quarter as higher input costs and a delayed summer squeezed margins even though revenue continued to rise. The Mumbai-based air-conditioning maker said net profit fell 15.1% from a year earlier to Rs 102.51 crore in the three months to June 30, while consolidated revenue climbed 13.3% to Rs 3,377.92 crore. According to the company’s filing, operating profit declined 12.5% and the EBITDA margin slipped to 5.2% from 6.7% a year ago, with profit before tax, excluding exceptional items, also down sharply.
The strain was most visible in Blue Star’s consumer-facing unitary products business, which includes room air conditioners and commercial refrigeration. Revenue in that segment rose 12.7%, but profit dropped to Rs 49.69 crore from Rs 87.47 crore a year earlier as trade inventories built up and pricing pressure persisted. The company said advertising, trade schemes and consumer finance offers helped support sales, but the shorter summer season meant demand arrived later than usual.
By contrast, the projects business held up better. Revenue from electro-mechanical projects and commercial air conditioning systems increased 15.1% to Rs 1,625.05 crore, with data centre investment helping order growth, according to Blue Star. The professional electronics and industrial systems division saw revenue fall 9.7%, although its segment result improved year on year. Independent analysis from Arthneeti said the company is still aiming to lift market share from about 11% to 12% towards 15%, with growth tied to commercial cooling, refrigeration and data centre demand.
Despite the margin pressure, the company ended the quarter with a larger order book and a stronger balance sheet. Blue Star said its carried-forward order book rose 13.5% to Rs 7,764.38 crore by June 30, while net cash increased to Rs 900.25 crore from Rs 370.92 crore a year earlier. Chairman and Managing Director Vir S. Advani said the company remained focused on balancing growth with profitability, while warning that commodity prices and exchange rates remain uncertain. Shares of Blue Star fell 5.65% on August 6 after the results were announced.
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