Blue Star Q2 Results: Profit Up 25% as Room AC Sales Jump, Margins Slip (October 29)

Blue Star’s Q2 results came with a clear split personality. Sales had a great quarter, helped by a summer that refused to end, but the air-conditioner maker kept less of each rupee because it could not pass on rising material costs. For the September quarter of FY27, consolidated revenue from operations rose 21% to ₹2,930.95 crore from ₹2,422.37 crore a year ago, The Economic Times reported on October 29.

Blue Star Q2 results: the headline numbers

Net profit rose 25.4% to ₹123.91 crore from ₹98.78 crore in Q2 FY26. That figure needs one asterisk, though. It includes an exceptional gain of ₹23.02 crore from selling the company’s MedTech business. Strip that out and the picture is flatter: profit before tax, before exceptional items and share of joint-venture results, barely moved, at ₹133.61 crore against ₹133.16 crore.

Operating profit (EBITDA excluding other income) grew 10.5% to ₹202.58 crore. Since revenue grew about twice as fast, the EBITDA margin slipped to 6.9% from 7.6%.

Here’s the twist. The Street had braced for worse. According to the CNBC-TV18 results liveblog, its analyst poll had pencilled in net profit of ₹70 crore, revenue of ₹2,760 crore, EBITDA of ₹147 crore and a margin of 5.3%. Blue Star beat all four.

Room ACs sold well, but earned little

The Unitary Products segment, which holds room ACs and commercial refrigeration, grew revenue 29.4% to ₹897.66 crore. The company credited an extended summer and a delayed monsoon. Yet the segment’s result (its profit before unallocated items) fell to ₹20.74 crore, or 2.3% of revenue, from ₹42.72 crore, or 6.2%, a year ago. Blue Star said periodic price hikes covered only part of the jump in material costs, and it is now trimming its product range towards cost-optimised models.

That is the number we would keep an eye on. A segment growing nearly 30% while its profit halves tells you pricing power is thin right now.

Projects and the data-centre pipeline

The larger Electro-Mechanical Projects and Commercial Air Conditioning Systems segment grew revenue 16.3% to ₹1,935.99 crore, but its result fell to ₹133.15 crore from ₹147.14 crore. Order inflows were driven mainly by data centres, and enquiries from factories stayed strong. Billing, however, was held back by project execution delays.

The small Professional Electronics and Industrial Systems segment grew 51.2% to ₹97.30 crore. Its result jumped to ₹23.10 crore from ₹6.17 crore, partly because warranty provisions were written back after the MedTech sale.

The carried-forward order book stood at ₹7,229.22 crore on September 30, 2026, a touch above ₹7,120.44 crore a year earlier. The balance sheet improved more sharply: Blue Star ended the quarter with net cash of ₹289.43 crore, against net borrowings of ₹417.06 crore a year ago.

What management is betting on

Chairman and MD Vir S Advani expects room AC demand to stay strong through the festive season and a healthy pipeline of data-centre MEP (mechanical, electrical and plumbing) projects to turn into significant orders in the coming months. The board also named Nithianand S, Group President for Supply Chain and Procurement, and Senthil Thangam, President of the Air Conditioning and Refrigeration Solutions Group, as senior management personnel from November 1. A procurement specialist in that role fits the margin problem neatly.

For investors, the quarter is a beat on estimates but not yet a fix on margins. Compare it with other consumer names that reported this week, such as Godrej Consumer’s Q2 and Asian Paints’ September quarter, and the theme of input costs keeps coming up.

Disclaimer: This article is for information and education only and is not investment advice. Please do your own research or consult a SEBI-registered adviser before making any investment decision.