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Blue Star faces the heat in Q1

Mint New Delhi

|

June 10, 2025

Cool quotient Blue Star has seen good market share growth over the past eight years despite strong competition.

- Pallavi Pengonda

Blue Star Ltd's shares are down as much as 35% from their 52-week high of ₹2,417 in January as a weak summer season is expected to hurt room air-conditioner (RAC) demand and sales.

Despite significantly underperforming the Nifty 500 index so far in 2025, the stock's rally of about 125% in 2024 means valuations don't bring a lot of comfort. Blue Star's shares still trade at almost 47 times FY26 estimated earnings, as per Bloomberg data, which is not particularly cheap.

The company ended FY25 with a 32% consolidated Ebitda growth to ₹876 crore, and a 45-basis points (bps) expansion in margin to 7.3%.

However, FY26 has begun on a softer note, thanks to a milder summer season and the early arrival of the monsoon. This means the seasonally strong June quarter (Q1 of FY26) now appears less exciting than expected.

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