Blue Star extends rally on healthy business outlook; surges 20% in 4 days

With a strong summer season and the introduction of a slew of new products, Blue Star is optimistic about its business prospects for FY26 and beyond

Shares of air conditioning (AC) and commercial refrigeration systems maker, Blue Star, rallied 9 per cent to Rs 2,217 on the BSE in Tuesday's intraday trade, extending their past three days' up move in an otherwise weak market. The demand interest in Blue Star share price was sparked on the back of a healthy outlook.

 

In the past four days, the stock of the household appliance company has surged 20 per cent. In comparison, the BSE Sensex has fallen 2.2 per cent during the same period. The stock had hit a 52-week high of Rs 2,419.95 on January 6, 2025.

 

With a strong summer season and the introduction of a slew of new products, Blue Star is optimistic about its business prospects for the fiscal year 2025-26 (FY26) and beyond.

 

The company's management is hopeful that the growth momentum shall continue owing to the key drivers such as the forthcoming summer season, record carried forward order book, a potential revival in government spending, and increased capex from the private sector. However, challenges such as the depreciation of the Indian Rupee, rising commodity prices, and potential supply chain disruptions may pose obstacles.  READ: Jupiter Wagons EV arm launches JEM TEZ, stock jumps 6%; details here

 

The demand for room ACs is seeing substantial growth, driven by intense summer heat across various parts of the country and the rising disposable incomes of India's expanding middle class. Additionally, this growth is fueled by the increasing demand in Tier 3, 4, and 5 markets, as well as by replacement buyers and those purchasing ACs for additional rooms in their homes. According to estimates, India's AC industry is projected to double by FY30.

 

To meet this growing demand, Blue Star has launched a slew of products, leveraging its manufacturing, R&D and innovation capabilities to introduce new, differentiated and best-in-class ACs.

 

Last week, Blue Star unveiled its new comprehensive range of 150 models of room ACs, including a 'flagship premium' range, for the upcoming summer season. The lineup features inverter, fixed speed, and window ACs, addressing the needs of every consumer segment across all price points.

 

With India set to add approximately 450 million middle-class consumers by 2030, the market for room ACs is at its inflection point and is poised to grow exponentially over the next few years. Positive trends, such as the expansion of the housing sector, increased adoption of renewable energy, and growth in the rural economy, are also expected to shape the industry's future, the management said.  READ: Bajaj Auto share price falls 4%, hits 52-week low; stock down 13% in 8 days

 

Meanwhile, for the first nine months (April to December) of the financial year 2024-25 (9MFY25), Blue Star reported a 56 per cent year-on-year (Y-o-Y) growth in its consolidated net profit at Rs 397.28 crore as compared to Rs 254.60 crore in 9MFY24. Revenue from operations grew 25 per cent Y-o-Y at Rs 7,949 crore compared to Rs 6,358 crore last year.

 

Operating profit margin improved to 7.5 per cent from 6.7 per cent Y-o-Y.

 

The management said the increase in revenue and profit can be attributed to the company's continued investments in expanding distribution channels, innovation, R&D, digital transformation, and strategic supply chain planning.