Blue Star shares surge nearly 5% on hopes of strong Q4 for room air conditioners

Shares of Blue Star, the country's leading air conditioner maker, rose as much as 4.65% to hit an intraday high of ₹1,813.10 on the National Stock Exchange on Friday, January 30, after the company said that it expects a strong March quarter for room air conditioner business. On the BSE, Blue Star shares rose as much as 4.56%.

Blue Star in an investor presentation said that it will increase prices of room air conditioners in the fourth quarter on account of rupee depreciation and surge in commodity prices.

"The depreciation of INR and rising commodity prices will compel us to revise the prices upwards in Q4FY26. The dealer network expansion is progressing as per the plan," Blue Star said in an exchange filing.

During the October-December period, Blue Star's revenue from operations rose 4% to ₹2,925 crore from ₹2,807 crore in the year-ago period.

Its net profit in the third quarter of current financial year fell 39% to ₹81 crore from ₹132 crore in the year-ago period.

The company, however, reported stable operational performance as its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also known as operating profit rose 5% to ₹220 crore and EBITDA margin improved by 10 basis points to 7.54%.

"During Q3FY26, the Company recorded modest revenue growth despite prevailing market headwinds. The good news is that for the first time in this fiscal, the Room Air Conditioners business has witnessed modest growth owing to channels building up the inventory ahead of energy label change deadline of January 1,2026," Blue Star said.

Blue Star's electro-mechanical projects and commercial air conditioning systems business saw its revenue rise 9% to ₹1,696 crore but its order inflow declined 16.5% compared to previous quarter.

"The commercial air conditioning business saw healthy order bookings in this quarter supported by strong demand. While the revenue during this quarter was subdued (as some product deliveries were shifted to next quarter), the strong order book gives confidence in the future prospects," Blue Star noted.

For the room air conditioner business Blue Star said that the energy-label change with effect from January 1, 2026, helped in reduction of inventory.

"The production of new range of products as per the new energy-label norms has begun and the Company is preparing for the summer season 2026. We have taken short-term and long term measures to achieve supply chain resilience," Blue Star said.

Blue Star said that the previous three quarter were challenging and signs of market revival are encouraging.

"The Company expects Q4FY26 to be a strong quarter for Room Air conditioners, Commercial Air Conditioning and Refrigeration products. In Electro-Mechanical Project Business, the demand from Factories & Datacenter vertical continues to be healthy. In anticipation of robust growth in FY2027 the Company is focused on expanding distribution reach and continues to invest in R&D, manufacturing and digitalization, while persisting with cost optimization measures," the company added.

As of 12:00 pm, Blue Star shares traded 3.61% higher at ₹1,795, outperforming the NIFTY LARGEMIDCAP 250 index which was down 0.3%.