Revenue for the quarter stood at ₹3,378 crore, a growth of 13.3% from the same quarter last year. However, the figure was below the CNBC-TV18 poll expectation of ₹3,547 crore.
The company attributed the revenue growth during the quarter to have taken place despite multiple headwinds, including an “unprecedented escalation in commodity prices,” which led to an increase in selling prices. The delayed onset and abrupt end of the summer season, significant inventory pile-up of old room ACs in the trade were also classified as headwinds.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹175 crore, down 12% from the year-ago period, and well below the CNBC-TV18 poll expectation of ₹247 crore.
EBITDA margin for the quarter stood at 5.2% from 6.7% last year. A CNBC-TV18 poll had pegged the figure at 7%.
A key positive during the quarter, according to the company’s statement, was the inflow of Data Center MEP project orders, reflecting the sustained momentum in the high-growth segment.
Within various business segments, Blue Star’s Electro-Mechanical Projects and Commercial Air Conditioning Systems segment grew by 15.1% from last year to ₹1,625.05 crore.
During the quarter, the company saw strong order bookings in the projects business, driven by investments in the data centers.
“However, order inflow from other market segments, including commercial offices, factories, and infrastructure remained sluggish as escalation in costs from West Asia led to deferment of order finalisations,” Blue Star said.
The company went on to add that strong enquiry momentum continues from the data center sector. The company is accelerating the closure of large infrastructure projects given the escalation in input material costs.
Revenue of the Unitary Products segment, which includes Room ACs and Commercial Refrigeration, saw a 12.7% growth during the quarter to ₹1,689.3 crore.
“Owing to the delayed onset of the summer season, there was pressure to liquidate the inventory pile-up with the trade during the quarter.
Blue Star stated that it was unable to achieve the desired primary sales volume growth, which in-turn impacted margins. The commercial refrigeration business saw a decline during the quarter, as demand for deep freezers from ice cream manufacturers remained muted. It does expect demand to pick-up during the upcoming festive season.
“While the medium-term fundamentals of the HVAC&R industry remain strong, the ongoing conflict in West Asia and the resulting market uncertainties warrant a cautious outlook for the remainder of the financial year,” Vir S. Advani, Chairman & Managing Director of Blue Star was quoted as saying.
Shares of Blue Star are trading 5.6% lower after the results announcement on Thursday at ₹1,571.8. The stock is down 15% so far this year.
