Blue Star (500067) Q4 25/26 earnings summary

Executive summary

• FY 2026 faced multiple headwinds, including a weak summer, GST changes, energy label updates, and supply chain disruptions from trade wars and geopolitical tensions.

• Q4 FY 2026 delivered record quarterly revenue, with EBITDA up 17% YoY and EPS up 17%, driven by a late but strong summer and improved demand for room air conditioners.

• FY 2026 revenue increased by 4% to ₹12,402 crore, with EBITDA up 6%, but net profit declined due to a one-time exceptional cost from new Labour Codes.

• Strong order momentum in Electro-Mechanical Projects, especially from buildings, data centers, and factories, with international expansion progressing despite tariff uncertainties.

• Management remains focused on cost control, margin protection, and maintaining market share, with cautious optimism for FY 2027.

Financial highlights

• Q4 FY 2026 consolidated revenue grew 1.3% YoY to ₹4,072 crore; EBITDA margin improved to 8%.

• Net profit for Q4 FY 2026 was ₹227.2 crore, up from ₹194 crore YoY.

• FY 2026 consolidated revenue was ₹12,401.99 crore, up from ₹11,967.65 crore YoY; EBITDA margin rose to 7.5%.

• FY 2026 net profit declined to ₹527.33 crore (4.23% margin) from ₹591.28 crore (4.9%) in FY 2025.

• Dividend recommended at ₹8.50 per share, down from ₹9 last year.

Outlook and guidance

• Management expects continued growth in Electro-Mechanical Projects and commercial air conditioning, supported by manufacturing and data center demand.

• Margin pressure anticipated in FY 2027 due to rising input costs and volatile exchange rates.

• Room air conditioner industry projected to double by FY 2030, but margins likely to remain under pressure due to competition and commodity prices.

• CapEx for FY 2027 expected in the ₹250–350 crore range.

• International business expansion in the US and Europe remains a focus area.