Blue Star Q1 net up 26% at Rs 39 cr

The company's operating income jumped by 8% to Rs 908 cr

Airconditioning and commercial refrigeration major Blue Star posted 26% increase in its net profit on standalone basis at Rs 39.04 crore for the quarter ended June 2015 as compared to Rs 31.10 crore in the corresponding quarter last year.

On the Bombay Stock Exchange, Blue Star shares were trading at Rs 338.55 a unit in early afternoon trade on Wednesday, a gain of 1.12% or Rs 3.75 from previous close.

The company’s operating income jumped by 8% to Rs 908.58 crore during April–June quarter of 2015 as against Rs 837.61 crore in the same quarter last year.

“A normal monsoon will result in enhanced demand for cooling products. Though the commercial construction cycle is yet to pick up, the company is confident that its expertise and credentials will hold it in good stead when the growth opportunities revive. During the rest of the year, while this performance is expected to sustain, a normal monsoon coupled with enhanced commercial construction activities will enable it to register significant growth,” the company said in a statement.

The revenues of the electromechanical projects and packaged airconditioning systems business posted a marginal 3% decline during the quarter under consideration, while segment results registered a decline of 17% to Rs 8.76 crore. The decrease in profitability was mainly due to sluggish execution of projects resulting in lower billings with a higher cost structure along with cost overruns in specific legacy projects.

Cooling products, comprising 61% of the total revenues of the company during the quarter, registered a growth of 17%. Despite the fact that the summer was not harsh with rains in several parts of the country in April and May, the business did much better than the industry expected mainly due to the company’s strong brand equity coupled with an enhanced product portfolio and distribution.

The professional electronics and industrial systems business had been transferred to its subsidiary, Blue Star E&E Ltd with effect from April 1, 2015. During Q1, due to commercial considerations, certain contracts were executed by Blue Star Ltd.