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 geopolitical events.

• Q4 FY26 delivered the highest-ever quarterly revenue, with EBITDA up 17% and EPS up 17%, driven by a late but strong summer and improved demand for room air conditioners.

• FY26 revenue increased by 4% to ₹12,402 crore, with EBITDA up 6%, but net profit declined to ₹527.33 crore due to exceptional items related to new Labour Codes.

• Strong order momentum in Electro-Mechanical Projects, especially from buildings, data centers, and factories, with international expansion progressing in the US and Europe.

• Management remains cautiously optimistic for FY27, with growth dependent on summer duration and ability to pass on cost increases.

Financial highlights

• Q4 FY26 consolidated revenue grew 1.3% year-over-year to ₹4,072 crore; full-year revenue up 4% to ₹12,402 crore.

• Q4 EBITDA rose to ₹326 crore (8% margin), up 17% year-over-year; Q4 net profit increased to ₹227.18 crore from ₹194 crore.

• FY26 net profit declined to ₹527.33 crore from ₹591.28 crore; EPS at ₹25.65, down from ₹28.76 due to exceptional item.

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

• Net cash position improved to ₹3,064 crore in FY26 from ₹640 crore in FY25; capital employed increased to ₹3,258 crore.

Outlook and guidance

• FY27 growth outlook is positive but contingent on summer intensity, duration, and successful price increases to offset cost inflation.

• Margin pressure expected to persist due to rising input costs and volatile exchange rates.

• Management targets 8%-8.5% margin for unitary products and 7%-7.5% for projects.

• Continued growth expected in Electro-Mechanical Projects, driven by strong demand from data centers and factories.

• Management continues to monitor the impact of new Labour Codes and will recognize any further changes in estimates as required.