Blue Star Achieves a 72% Surge in Net Profit to Reach Rs 100.46 Crores in Q3FY24

Mumbai, January 30, 2024 – Blue Star Limited, a prominent player in the air conditioning and refrigeration industry, experienced a significant uptick in demand for its room air conditioners and commercial refrigeration products during the festive season. This heightened demand was not only confined to the consumer segment but also extended to the commercial and industrial sectors, particularly evident in the commercial air conditioning and electro-mechanical projects business of the Company. The cumulative effect of this surge in demand propelled the Company to achieve a historic Q3 in terms of revenue.

Consolidated Financial Performance for Q3FY24: The financial metrics for the third quarter of FY24 reveal a commendable growth trajectory:

Revenue from Operations surged by an impressive 24.9%, reaching Rs 2241.19 crores for the quarter ended December 31, 2023, as compared to Rs 1794.17 crores during the corresponding period in the previous year.
The Operating Profit (PBIDTA excluding Other Income) exhibited a substantial improvement, soaring to Rs 155.35 crores (6.9% of Revenue) in Q3FY24, in stark contrast to Rs 104.71 crores (5.8% of Revenue) in Q3FY23. This growth was primarily driven by enhanced scale and higher gross margins.
Other Income, including treasury income, for Q3FY24 marked a notable increase, standing at Rs 12.67 crores compared to Rs 5.16 crores in Q3FY23.
The Tax expense for the quarter witnessed an uptick, reaching Rs 33.93 crores compared to Rs 21.64 crores in Q3FY23.
The Profit Before Exceptional Items demonstrated a substantial growth of 67.9%, amounting to Rs 134.39 crores during the quarter, compared to Rs 80.05 crores in the corresponding period of the previous fiscal year.
Consequently, the Net Profit for the quarter experienced a significant surge, growing by 72% to Rs 100.46 crores, as opposed to Rs 58.41 crores in the same quarter of the preceding year.
The Earnings per share (Face value of Rs 2.00) for Q3FY24, computed on an enhanced base, stood at Rs 4.89, showcasing a notable improvement from Rs 3.03 for Q3FY23.

In addition to these financial achievements, the carried-forward order book as of December 31, 2023, displayed an impressive growth of 24.2%, reaching Rs 6038.53 crores, compared to Rs 4861.99 crores as of December 31, 2022. This reaffirms a positive trend in the Company’s order pipeline and future business prospects.

Strategic Initiatives and Capital Allocation: Blue Star Limited, in line with its commitment to sustainable growth, continues to invest strategically in expanding its manufacturing capacity, accelerating Research and Development (R&D) efforts, and embracing digitalization. These initiatives are integral parts of the Company’s growth plans and profitability improvement programs. As a result of these strategic investments, the Capital Employed as of December 31, 2023, witnessed a significant increase, reaching Rs 2298.88 crores, as compared to Rs 1505.56 crores as of December 31, 2022.

Moreover, the Company successfully ended the quarter with a net cash position of Rs 157.30 crores, signifying a notable turnaround from a net borrowing of Rs 395.85 crores as of December 31, 2022. This transformation in the financial position reflects the effectiveness of the Company’s financial management strategies and the positive impact of its operational performance.

Segment-Wise Performance for Q3FY24: The business segments of Blue Star Limited displayed robust performances during Q3FY24:

Electro-Mechanical Projects and Commercial Air Conditioning Systems:
- Revenue for this segment grew by 17.9% to Rs 1182.30 crores during the quarter, compared to Rs 1002.97 crores in the same quarter of the previous year.
- The Segment Result reached Rs 96.66 crores (8.2% of Revenue), a significant improvement from Rs 71.68 crores (7.1% of Revenue) in Q3FY23.
- Despite a slowdown/delay in order finalizations and tender inflow in commercial buildings and infrastructure segments, the execution of existing projects in the Electro-Mechanical Projects business remained on track.
- The Commercial Air conditioning business sustained good demand from various sectors, including industrial, healthcare, education, and retail. A notable increase in demand was also observed from Tier 3 & 4 cities.
Unitary Products:
- Revenue in this segment experienced robust growth, surging by 35.5% to Rs 955.38 crores in Q3Y24, compared to Rs 704.99 crores in Q3Y23.
- The Segment Result showed impressive growth, reaching Rs 67.93 crores (7.1% of Revenue) in Q3Y24, compared to Rs 51.83 crores (7.4% of Revenue) during the same period last year.
- A strong festive season fueled growth in the room air conditioners business, compensating for a tepid summer season. The commercial refrigeration business witnessed substantial growth driven by heightened demand for deep freezers and modular cold rooms.
- Stability in raw material prices, exchange rates, total cost management, and the introduction of new products contributed to the profitability of this segment.
Professional Electronics and Industrial Systems:
- The revenue for this segment recorded a growth of 20.1%, reaching Rs 103.51 crores in the quarter, compared to Rs 86.21 crores in Q3FY23.
- The Segment Result demonstrated a notable increase, reaching Rs 15.21 crores (14.7% of Revenue) in Q3FY24, compared to Rs 10.98 crores (12.7% of Revenue) in Q3FY23.
- The non-destructive testing business continued to gain traction, while the healthcare business benefited from the ongoing expansion of the country’s healthcare infrastructure and increased private and public investments.

Consolidated Financial Performance for Nine Months Ended December 31, 2023: The financial performance for the nine months ended December 31, 2023, underscores Blue Star Limited’s sustained growth:

Revenue from Operations for this period amounted to Rs 6357.59 crores, exhibiting a substantial growth of 18.8%, compared to Rs 5353.49 crores over the same period in the previous year.
The Operating Profit (PBIDTA excluding Other Income) stood at Rs 423.04 crores (6.7% of Revenue), a significant improvement from Rs 313.61 crores (5.9% of Revenue) during the same period last year.
Net Profit for the nine months reached Rs 254.60 crores, showing a remarkable growth of 45.2%, compared to Rs 175.40 crores during the same period in the previous year.

Outlook and Future Prospects: Vir S. Advani, Vice Chairman & Managing Director of Blue Star Limited, expressed satisfaction with the Company’s stellar operating performance across all its businesses during the current financial year. The buoyant festive season, coupled with robust demand from the corporate and commercial segments, including Tier 3 and 4 towns, enabled the Company to sustain its performance during the quarter.

Looking ahead, Blue Star Limited anticipates a strong summer season, expecting robust demand for room air conditioners and commercial refrigeration products. The carried-forward order book for the B2B businesses remains healthy, instilling confidence that the execution pace will be sustained. As a result, the Company is optimistic about concluding FY24 on a high note, marking a significant milestone in its 80th anniversary year.

In summary, Blue Star Limited’s Q3FY24 performance reflects its resilience, strategic focus on growth, and adaptability to market dynamics, setting the stage for continued success in the evolving landscape of the air conditioning and refrigeration industry.