Blue Star (500067) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue grew to ₹2,422 crore, with EBITDA up 23% and net profit at ₹99 crore, despite weak demand from a poor summer, GST changes, and persistent rains impacting room air conditioners and some commercial segments.

• H1 FY26 revenue rose 5% year-over-year, but profit before tax dropped 17% and net profit declined to ₹219.60 crore.

• The business model remains diversified across air conditioning, refrigeration, and MEP solutions, with operations in over 18 countries.

• Inventory levels remain elevated, with liquidation a key focus before new energy efficiency norms take effect in January 2026.

• The Board approved unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2025.

Financial highlights

• Q2 FY26 revenue from operations was ₹2,422 crore, up 6.4% year-over-year; EBITDA rose to ₹183.4 crore (margin 7.6%) from ₹149.3 crore (margin 6.6%).

• Net profit for Q2 FY26 was ₹99 crore, with EPS at ₹4.80; net profit margin was 4.06%.

• Carried forward order book as of September 30, 2025, was ₹7,120 crore, up 7.9% year-over-year.

• Capital employed rose to ₹3,531 crore, with net borrowings at ₹417 crore versus a net cash position last year.

• H1 FY26 revenue was ₹5,405 crore, up 5% year-over-year; EBITDA: ₹383 crore, down 1%.

Outlook and guidance

• H2 FY26 is expected to be better, but full-year growth is likely to be flat or slightly negative compared to the previous year.

• Room air conditioner business faces margin pressure due to high inventory and upcoming energy label changes; year-end margin guidance is 7–7.5%.

• Commercial air conditioning and refrigeration expected to see demand revival in H2, aided by GST rate rationalization and new product launches.

• International business growth potential is linked to India-US trade developments.

• Long-term industry CAGR remains strong at 15–19%, with the company aiming to outpace the market.