New Delhi: Blue Star Limited is preparing for a high-stakes summer season after navigating a “subdued” third quarter marked by modest growth and regulatory transitions.
The company reported revenue from operations of ₹2,925.31 crore for the quarter ended December 31, 2025, a 4.2% increase compared to the previous year. While net profit took a hit—falling to ₹80.55 crore due to a one-time exceptional item related to labor code changes—management remains optimistic that the worst of the sector-wide slowdown is over.
Summer Ready: The RAC Revival
After a challenging 2025 where weak summer demand tested the industry, Blue Star’s Managing Director, B. Thiagarajan, indicated that the RAC business is finally returning to its growth path. The third quarter saw a revival as dealers built up inventory ahead of the mandatory energy label change that took effect on January 1, 2026.
However, consumers should brace for a price pinch. The company expects a net price increase of approximately 10% in Q4 FY26. This hike is a combined result of the new energy label requirements, rising commodity costs, and rupee depreciation, which have more than offset the benefits of recent GST reductions.
”Weatherproofing” the Business
To mitigate the impact of unpredictable weather patterns, Blue Star is aggressively implementing a “weatherproofing” strategy. This involves diversifying its portfolio to be less season-dependent by focusing on:
B2B Segments: Strengthening the Commercial Refrigeration and Electro-Mechanical Projects (EMP) businesses.
Variable Spending: Shifting marketing and advertisement costs to be more flexible, ensuring spending only ramps up when demand is certain.
Localization: Reducing reliance on imports to manage inventory more efficiently and mitigate supply chain disruptions.
Segmental Snapshot and Future Targets
While the Unitary Products (primarily ACs) saw flattish revenue of ₹1,154.22 crore, the Electro-Mechanical Projects segment remained a strong performer with 8.6% growth. The company’s carried-forward order book remains robust at nearly ₹6,900 crore, although the management is being “extremely cautious” about low-margin infrastructure projects.
Looking ahead to FY27, Thiagarajan has set ambitious targets, modeling an 18-20% growth rate for the RAC segment and 12-15% for commercial refrigeration. “We have not seen two consecutive summers wash out like this,” he noted, expressing confidence that pent-up demand and low market penetration will drive the next cycle of growth.