Corporate Performance     

Published: May 15, 2026
Updated: May 15, 2026

Blue Star

Order book grows despite headwinds

Air-conditioner major Blue Star registered a nominal 3.6% revenue growth in FY26, despite multiple headwinds impacting its businesses. The room AC business was adversely impacted during the summer of 2025 due to unseasonal rains. However, demand picked up towards the end of the year, helping the company record its highest-ever quarterly revenue in Q4FY26. Further, growth in projects, commercial air- conditioners and international business helped offset external challenges and contributed to the company’s overall performance for the year. The carried-forward order book as of March 31, 2026 grew by 10.5% to Rs 6,923 crore, compared to Rs 6,263 crore as of March 31, 2025.

On a consolidated basis, the company’s revenue from operations increased to Rs 12,401.99 crore for the year ended March 31, 2026, as compared to Rs 11,967.65 crore for the year ended March 31, 2025, representing a growth of 3.6%. Operating profit (PBIDTA, excluding other income) for the year grew by 6.2% to Rs 930.41 crore, compared to Rs 875.92 crore in FY25, mainly owing to the company’s overall focus on cost management.

The finance cost for FY26 was Rs 72.14 crore, compared to Rs 48.80 crore in FY25, mainly due to higher borrowing levels to support working capital requirements during the year. Capital employed as of March 31, 2026 increased to Rs 3,258.41 crore, as compared to Rs 2,427.28 crore as of March 31, 2025.

DIP IN P.A.T.

Net profit for the year declined to Rs 527.33 crore (4.3% of revenue) compared to Rs 591.28 crore (4.9% of revenue) in FY25. Earnings per share for the year (face value Rs 2) was Rs 25.65 vis-à-vis Rs 28.76 in the previous year. The board has recommended a dividend of Rs 8.5 per equity share for FY26 (previous year Rs 9).

The revenue from the electro-mechanical projects and commercial air-conditioning systems segment grew by 12.8% to Rs 6,762.80 crore in FY26 compared to Rs 5,997.99 crore in FY25. The segment result for FY26 grew to Rs 501.91 crore (7.4% of revenue) compared to Rs 490.88 crore (8.2% of revenue) in FY25. The electro-mechanical projects business delivered a steady revenue performance, supported by demand from buildings, data centres and factories.

The commercial air-conditioning business also maintained a steady momentum, supported by enhanced offtake from government, industrial and retail segments. However, traction from the office, education and IT sectors remained subdued during Q4FY26. Revenue growth in ducted systems and chillers remained robust during the year, and VRF systems demonstrated steady progress. The margins for this segment were influenced by the composition of businesses within this segment.

Unitary products revenue declined by 5.1% to Rs 5,332.36 crore in FY26, compared to Rs 5621.11 crore in FY25. Consequently, the segment result stood at Rs 434.82 crore in FY26 compared to Rs 471.26 crore in FY25. Due to the early onset of the monsoon and an overall mild summer, the room air-conditioning business was highly impacted in Q1FY26. However, there was healthy demand during Q4FY26, driven by enhanced primary offtake in March and channel stocking across all regions ahead of the summer. The company also launched a wide new range of room ACs in Q4FY26, complying with the new BEE norms which came into effect from January 1, 2026. The range includes a premium flagship series, covering all consumer segments and price points.

BELT-TIGHTENING

Cost rationalisation measures taken throughout the year and deferment of certain discretionary costs resulted in improved margins for the quarter. In the commercial refrigeration business, muted demand from the frozen food and QSR segments kept the deep freezers and cold rooms market largely stagnant during the year. Meanwhile, storage water coolers delivered double-digit growth, driven by government and corporate sectors.

Revenue from the professional electronics and industrial systems business declined by 12.0% to Rs 306.83 crore in FY26 as compared to Rs 348.55 crore in FY25. The segment result stood at Rs 34.89 crore in FY26 compared to Rs 29.72 crore in FY25. Uncertainty surrounding the regulatory policy framework for the med-tech solutions business persisted during the year, leading to a moderation in performance. Meanwhile, the industrial solutions business continued to deliver strong growth, driven by the automotive and steel sectors, while the data security solutions business maintained a steady performance.

Commenting on the business outlook, Vir S Advani, Chairman & Managing Director, said, “FY26 was a challenging year shaped by multiple external factors, but it concluded on a positive note. The onset of summer from mid-April 2026 has led to a steady pickup in consumer sales of room ACs, indicating improving market momentum for FY27. The electro-mechanical projects and commercial air- conditioning segments are expected to sustain their growth trajectory, supported by demand from the manufacturing and data centre sectors.”

Expressing some reservations, Mr Advani said, “Rising input and commodity costs along with volatile exchange rates may present some challenges in managing margins. Further, the ongoing Middle East crisis may lead to supply chain disruptions and could dampen growth. Overall, we remain cautiously optimistic about the outlook for FY27, while continuing to take a balanced approach and strengthen operational efficiencies to navigate the evolving business environment.”