Blue Star Ltd (500067) – Q1 FY26 Results & Deep Dive
The company is a leading Indian player in air-conditioning, commercial refrigeration and related services. It operates in the consumer durables / cooling segment, which is highly sensitive to seasonal trends, raw-material input costs and macro-economic demand. This post analyses the recent quarter results of Blue Star Ltd, explains financial terms in a straightforward manner, compares with peers and offers a verdict for investors.
Below are the key result highlights for Q1 FY26 (quarter ended 30 June 2025):
| Metric | Value | YoY / Notes |
|---|---|---|
| Revenue from operations | ₹ 2,982.25 cr | ↑ ~4.1% vs ₹ 2,865.37 cr last year. 2 |
| EBITDA | ₹ 199.99 cr | ↓ ~16% vs ₹ 237.83 cr last year. 3 |
| EBITDA margin | 6.7% | ↓ from ~8.3% last year. 4 |
| Net profit (PAT) | ₹ 120.96 cr | ↓ ~28% vs ₹ 168.84 cr last year. 5 |
What do these terms mean?
- Revenue is the total amount of money the company earned from its core business (e.g., sales of air-conditioners, refrigeration units and services).
- EBITDA means Earnings Before Interest, Taxes, Depreciation and Amortisation – it shows the company’s operational profitability before accounting for its financing costs, taxes and non-cash depreciation/amortisation.
- EBITDA margin is EBITDA divided by revenue, expressed as a percentage – it shows the operational efficiency: the higher, the better.
- Net profit (PAT) is what remains after all expenses, interest, tax and depreciation have been accounted for – essentially the “bottom line.”
What’s happening for Blue Star?
The company managed to grow revenue modestly (≈ 4%), which is respectable given that the summer season in India was muted by increased rainfall and thus lower consumer demand. 6 However, profitability took a hit: margins compressed significantly, EBITDA fell ~16% and the net profit declined ~28%. This suggests cost pressures (raw-material, energy, overheads) and perhaps weaker pricing power or product mix challenges.
Peer comparison (for context):
| Company | 5 Yr Profit CAGR / ROE etc | Comments |
|---|---|---|
| Blue Star | Profit growth ~32% CAGR over last 5 yrs; ROCE ~26.2%; ROE ~20.6%. 7 | Strong historically, now facing near-term headwinds. |
| Peers (e.g., other AC / durable firms) | Varies widely; margin pressure is common. | Competitive environment, commodity cost exposure, seasonal demand. |
SWOT Analysis
| Strengths | Weaknesses | Opportunities | Threats |
|---|---|---|---|
| Long track record, strong brand in AC/refrigeration space; healthy historical profit growth. 8 | Margin squeeze this quarter, seasonal demand risk, high cost base. | Potential boost from tax cuts and rising demand; product innovation. 9 | Delay in demand recovery, input cost inflation, intense competition. |
Key risks & considerations:
- The weaker summer highlights how sensitive the business is to demand. If consumers delay purchases, revenue suffers.
- High input costs and lower margins can erode profitability quickly.
- Competitive pressure from other durable goods firms may force price cuts or reduce margin flexibility.
Final verdict:
For investors, Blue Star presents a good long-term story given its established business and growth history. However, the current results show a warning flag — modest top-line growth but sharp margin decline. If you are looking for long-term investment, it may be worth holding or adding only if you believe the demand recovery and cost control will kick in soon. For short-term trades, one should be cautious until margin stabilisation shows up.
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Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, notes that Blue Star Ltd.’s long-term fundamentals remain intact but the recent quarter underlined margin weakness and demand sensitivity. Investors should monitor upcoming quarters for improvement in margin and demand trends before aggressive accumulation. Discover more analytical perspectives and fact-based guidance at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Blue Star Ltd
- How has Blue Star’s margin changed over the years?
- What is Blue Star’s competitive standing vs other AC makers?
- When is Blue Star’s next growth leg likely to come from?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment adviser before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
