Blue Star’s revenue recovers to pre-COVID level in Q2FY22; Net Profit doubles over Q2FY21

The quarter commenced on a strong note with an extended summer in the northern parts of the country.

The Company witnessed healthy demand and robust volume growth for room air conditioners and refrigeration products in Q2FY22 compared to Q2FY21. This was on account of the ebbing of the second wave of the pandemic and the consequent easing of restrictions combined with improvement in consumer sentiment. Commercial, Manufacturing and other Institutional segments also revived. Most importantly, collections were healthy resulting in substantial reduction in borrowings. Escalation in commodity prices, logistics costs and depreciation of the rupee exerted margin pressure, which was partially offset by price increases, cost reduction initiatives and improvement in operational efficiency.

Consolidated Segment Performance for Q2FY22

• Revenue of the Electro-Mechanical Projects and Commercial Air Conditioning Systems grew by 33.8 percent to ₹723.40 crores in Q2FY22 compared to ₹540.83 crores in Q2FY21. The Segment Result for Q2FY22 was ₹46.54 crores compared to ₹34.41 crores in Q2FY21. Overall pace of execution of projects and order finalisations improved compared to the previous quarter. While the order inflows from the Factories and Light Industrial sectors continued to be encouraging, order inflows /enquiries from the Infrastructure and the Commercial Realty sectors also began to pick up. Continued traction in the Healthcare, Pharmaceutical, Industrial and Government customer segments coupled with recovery in key segments, namely, Retail, IT and Educational Institutions enabled encouraging growth for the Commercial Air Conditioning business.
• Unitary Products revenue grew by 42.7 percent to ₹454.71 crores in Q2FY22 compared to ₹318.65 crores in Q2FY21. The Segment Result grew by 98.3 percent to ₹23.26 crores in Q2FY22 compared to ₹11.73 crores in Q2FY21. Despite extended monsoon, Room AC business grew on the back of upgradation of residences and the revival of the light commercial sector coupled with consolidation of e-com channel. Continued traction for the medical and supermarket refrigeration equipment coupled with a recovery in demand for storage water coolers due to the partial opening up of educational institutions and commercial establishments enabled a growth in revenue for the commercial refrigeration business during the quarter.
• The Professional Electronics and Industrial Systems Business revenue grew by 44.5 percent to ₹61.63 crores in Q2FY22 compared to ₹42.64 crores in Q2FY21 driven by a few high value orders secured in the Data Security Solutions, Non-Destructive Testing, and Healthcare businesses. The Data Security Solutions business continued to do well, led by the various digitisation initiatives in the BFSI sector. The Testing Machines business also witnessed growth with a revival of investments in the Manufacturing sector. Segment Result grew by 20.6 percent to ₹9.83 crores compared to ₹8.15 crores in Q2FY21.

Outlook

Vir S. Advani, Vice Chairman & Managing Director, Blue Star Limited adds, “With the revenue reaching pre-COVID level in Q2FY22, we expect the growth momentum to continue through Q3 and Q4 leading up to the next summer season. The pricing corrections will continue, depending on movement in input costs. At the same time, product cost rationalisation through value engineering and alternate designs, as well as operating cost reduction will be undertaken to counter the margin pressure.”

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