Blue Star reported modest revenue growth of 6.4% to ₹2,422 cr in Q2 FY26 amidst a challenging environment. Demand slowdown in Room Air-Conditioners due to extended monsoons and GST-related deferrals impacted sales. The company expects a better second half, focusing on cost control and inventory management. Carried-forward order book stands at ₹7,120 cr, a 7.9% increase year-over-year.
Financial Performance Overview
Blue Star reported a revenue of ₹2,422 cr in Q2 FY26, a 6.4% increase compared to ₹2,276 cr in Q2 FY25. EBITDA excluding other income improved to ₹183.4 cr with a margin of 7.6%. Net profit saw a modest increase of 2.8%, reaching ₹99 cr. The company faced challenges including a subdued monsoon and GST implementation delays.
Segment Highlights
Electro-Mechanical Projects and Commercial AC
This segment saw revenue growth of 16.5%, reaching ₹1,664 cr. The segment result was ₹147 cr, representing 8.8% of revenue. Order inflow remained relatively flat. The carried-forward order book for Electro-Mechanical Projects stood at ₹4,840 cr.
Unitary Products
Revenue in this segment decreased by 9.5% to ₹694 crores. Cooling and Purification Products faced impacts, but Commercial Refrigeration is expected to see demand growth in H2 FY26 due to GST rate reductions.
Professional Electronics and Industrial Systems
The segment revenue de-grew by 20.1% to ₹64 cr. The de-growth is mainly because of issues surrounding the current business model of MedTech solutions pending the finalization of regulatory policy framework.
Business Outlook and Strategy
Blue Star remains optimistic about the Room AC business, expecting demand to pick up in Q3 FY26 due to GST benefits. The company is focused on reducing operating costs and working capital to improve H2 FY26 performance. Initiatives are underway to reduce inventory levels and prepare for the energy label changes taking effect in January 2026.
Key Considerations
The company noted that inventory levels are high in the market, requiring prioritization of channel and manufacturer liquidation. The company expects pressure on margins due to inventory levels but aims to maintain price discipline. The company will be focusing on managing inventory, controlling expenses, and growing faster than the market.
Source: BSE
