Blue Star Q1 FY27 Results Analysis: Revenue Grows 13.3%, PAT Falls 20.9% (BLUESTARCO)

Blue Star Ltd's Q1 FY27 numbers came in soft, with revenue of Rs. 3,377.92 Cr (+13.30% YoY) and PAT growth of -20.90% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Blue Star delivered its first double-digit revenue growth (13.3% YoY) in five quarters, driven by strong summer demand and a healthy EMP order book. However, severe margin compression dragged EBITDA margin to 5.18% (down 153 bps YoY) and normalized PAT fell 20.9%, as cost pass-through gaps and inventory swings weighed on profitability. The balance sheet strengthened further with zero net debt and improved working capital, while subsidiary earnings surged 167% YoY, partially offsetting the core earnings decline.

Key Investment Insights

Key Positives

• Consolidated revenue grew 13.3% YoY to Rs.3,377.92 cr, the first double-digit growth in five quarters
• Balance sheet strengthened: debt/equity fell to 0.00, net worth rose 10.8% YoY to Rs.3,533.72 cr, and current ratio improved to 1.36
• Working capital improved: inventory days reduced 14 days YoY to 72.95, debtor days flat at 52.6
• Subsidiary contribution to consolidated PAT-to-owners surged 167% YoY to Rs.33.14 cr, diversifying earnings
• Segment revenue growth was broad-based: EMP & Commercial AC +15.0%, Unitary Products +12.7%

Risk Factors

• EBITDA margin (excl. OI) fell 153 bps YoY to 5.18%, the lowest in the FY26 quarterly series
• Unitary Products EBIT margin halved to 2.94% from 5.83% a year ago, despite 12.7% revenue growth
• Normalized PAT (excluding exceptional gain) declined 20.9% YoY to Rs.95.53 cr
• EMP & Commercial AC EBIT margin at 6.78% missed management's stated 7.0-7.5% guidance band
• Cost pass-through gap persists: price increases implemented short of required 13%, contributing to margin compression