Blue Star’s consolidated net profit declined 14.9 per cent year-on-year (YoY) to Rs 102.51 crore in the first quarter of financial year 2027, even as revenue from operations rose 13.3 per cent to Rs 3,377.92 crore. Higher commodity costs, a delayed summer season and inventory pressure weighed on profitability during the quarter.
Revenue from operations stood at Rs 3,377.92 crore, compared with Rs 2,982.25 crore in Q1FY26. Operating profit, excluding other income, declined to Rs 174.95 crore from Rs 199.99 crore, while the Ebitda margin contracted to 5.2 per cent from 6.7 per cent.
Profit before tax, excluding exceptional items, fell 23.7 per cent YoY to Rs 125.62 crore from Rs 164.64 crore. Tax expense declined to Rs 32.08 crore from Rs 42.41 crore.
Blue Star said the quarter was affected by a sharp increase in commodity prices, which led to an increase in selling prices, along with a delayed onset and abrupt end to the summer season. This resulted in higher inventory of older room air-conditioners with trade partners, further affecting the business.
“The Company delivered modest revenue growth in Q1FY27 despite multiple headwinds,” said Vir S. Advani, Chairman and Managing Director, Blue Star.
Room AC Business Weighs On Margins
Blue Star’s Unitary Products segment, which includes room air-conditioners and commercial refrigeration, reported a 12.7 per cent YoY increase in revenue to Rs 1,689.31 crore. Segment profit, however, declined to Rs 49.69 crore from Rs 87.47 crore, while the segment margin fell to 2.9 per cent from 5.8 per cent.
The company said the delayed summer season put pressure on trade partners to liquidate inventory. While Blue Star sought to pass on part of the higher input costs through primary sales, operating prices in the market remained subdued.
Advertising, trade schemes and consumer finance offers were increased to support tertiary sales during the shorter summer window. However, the company did not achieve its targeted growth in primary sales volumes, affecting segment margins.
Commercial refrigeration also remained under pressure, with demand for deep freezers from ice cream manufacturers muted during the quarter. Blue Star expects demand in the category to improve during the upcoming festival season.
Data Centre Orders Lift Projects Business
The Electro-Mechanical Projects and Commercial Air Conditioning Systems segment reported a 15.1 per cent YoY increase in revenue to Rs 1,625.05 crore, supported by strong order bookings in the projects business. The company said investments in data centres continued to drive orders for its electro-mechanical projects business. Its carried-forward order book stood at Rs 7,764.38 crore as of 30 June 2026, an increase of 13.5 per cent from Rs 6,843.04 crore a year earlier.
“The Electro-Mechanical Projects business witnessed a strong inflow of orders for Data Centre MEP projects, which is expected to support growth in the coming quarters,” Advani said.
Blue Star said enquiry momentum from the data centre sector remained strong. However, order inflows from commercial offices, factories and infrastructure remained sluggish, with cost escalation linked to the West Asia crisis resulting in deferred order finalisations.
The commercial air-conditioning business recorded healthy order bookings during the quarter, led by demand from industrial, retail and healthcare segments. The company expects its enquiry pipeline and order inflow to support growth through the rest of the financial year.
Professional Electronics Revenue Declines
Revenue from the Professional Electronics and Industrial Systems business declined 9.7 per cent YoY to Rs 63.56 crore. Blue Star attributed the decline primarily to continued challenges in its MedTech Solutions business, while the Industrial Solutions business continued to grow, supported by demand from the manufacturing and testing sectors.
“Commodity prices and exchange rates, however, remain highly volatile, and our endeavour will be to prudently balance volume growth and margins across our product businesses,” Advani said.
The company said it will continue to focus on research and development, value engineering and product optimisation to improve competitiveness, while maintaining control over operating costs.
Blue Star expects the medium-term fundamentals of the heating, ventilation, air-conditioning and refrigeration (HVAC&R) industry to remain strong. However, it maintained a cautious outlook for the remainder of FY27 amid the ongoing conflict in West Asia and related market uncertainties.
