Margin expansion and strong project business lift Q4 performance, while full-year profit declines amid weather-led demand pressures and higher costs
Air-conditioning and commercial refrigeration company Blue Star on Wednesday (May 6) reported a 17 per cent year-on-year increase in consolidated net profit for the fourth quarter of FY26, at Rs 227 crore, compared with Rs 194 crore in the corresponding period last year.
Operating profit (Pbitda excluding other income) rose 16.8 per cent to Rs 326.25 crore, accounting for 8 per cent of revenue, up from Rs 279.40 crore, or 7 per cent of revenue, in Q4FY25.
Ebitda for the quarter grew 16.6 per cent year-on-year to Rs 325.2 crore. Ebitda margin improved to 8 per cent from 6.9 per cent a year earlier.
The company said that following the notification of labour codes and guidance from the Institute of Chartered Accountants of India, it had earlier accounted for an estimated additional liability of Rs 56.35 crore towards gratuity and leave encashment up to 31 December 2025, as an exceptional item. This estimate was revised to Rs 38.83 crore in Q4FY26, leading to a reversal of Rs 17.52 crore during the quarter.
Finance costs rose to Rs 23.06 crore from Rs 18.75 crore in the year-ago quarter, while other income remained largely unchanged at Rs 23.95 crore. Tax expenses increased to Rs 72.91 crore from Rs 54.82 crore.
Profit before share of profit or loss from joint ventures and exceptional items climbed 11.9 per cent to Rs 278.92 crore. Net profit rose 17.1 per cent to Rs 227.18 crore, compared with ₹194 crore in the same quarter last year.
For the full financial year FY26, revenue from operations grew 3.6 per cent to Rs 12,401.99 crore from Rs 11,967.65 crore in FY25. The Room Air Conditioner segment faced headwinds due to unseasonal rainfall during the summer of 2025, though demand picked up towards the end of the year, helping the company achieve its highest-ever quarterly revenue in Q4FY26. Growth in projects, commercial air-conditioning, and international business segments also supported overall performance.
Operating profit for the year increased 6.2 per cent to Rs 930.41 crore, representing 7.5 per cent of revenue, compared with Rs 875.92 crore, or 7.3 per cent, in FY25. However, profit before exceptional items and tax declined 3.9 per cent to Rs 741.94 crore. Net profit for FY26 stood at Rs 527.33 crore, down from Rs 591.28 crore in FY25, with margins easing to 4.3 per cent from 4.9 per cent.
Other income fell 17.5 per cent to Rs 61.91 crore, while finance costs rose sharply to Rs 72.14 crore from Rs 48.80 crore, largely due to increased borrowings for working capital. Tax expenses came in at Rs 175.78 crore, with an effective tax rate of 25 per cent.
The company’s net cash balance declined to Rs 175.45 crore as of 31 March 2026, compared with Rs 640.35 crore a year earlier. Capital employed increased to Rs 3,258.41 crore from Rs 2,427.28 crore. Earnings per share (face value Rs 2) stood at Rs 25.65 versus Rs 28.76 in the previous year.
Its order book grew 10.5 per cent to Rs 6,923 crore as of 310 March 2026, from Rs 6,263.36 crore a year earlier.
Segment-wise, revenue from the Electro-Mechanical Projects and Commercial Air Conditioning Systems business rose 12.8 per cent to Rs 6,762.80 crore. However, margins narrowed to 7.4 per cent from 8.2 per cent despite a marginal increase in segment profit.
Revenue from the Unitary Products segment declined 5.1 per cent to Rs 5,332.36 crore, with segment profit also falling and margins slightly compressing. The company attributed the decline to a weak start to the year due to early monsoon conditions and a mild summer, although demand recovered in the final quarter, supported by higher offtake and pre-summer channel stocking.
The Professional Electronics and Industrial Systems segment reported a 12 per cent decline in revenue to Rs 306.83 crore, although profitability improved, with margins expanding to 11.4 per cent.
The board has recommended a final dividend of Rs 8.5 per equity share (face value Rs 2) for FY26, subject to shareholder approval at the annual general meeting. The payout will be made after 6 August 2026, to eligible shareholders on record as of 17 July 2026.
