Blue Star Limited: Comprehensive Stock Analysis Report | Scrolls
- Editor
- Sep 4
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by KarNivesh | 04 September, 2025
Overview
Blue Star Limited, India’s second-largest homegrown air conditioning (AC) company, is a market leader in commercial refrigeration and MEP (mechanical, electrical, plumbing, and firefighting) contracting. Established in 1943, the company has built a strong presence with over 80 years of operations. It has consistently delivered strong financial growth, achieving a 29.65% revenue CAGR and 55.80% net income CAGR between FY2021–FY2025. The Indian cooling solutions market, currently valued at ₹27,500 crores, is expected to double to ₹55,000 crores by 2028, presenting significant opportunities.
Business Model and Operations
Blue Star operates through an integrated model covering manufacturing, EPC services, and after-sales support across residential, commercial, and infrastructure segments. It has seven modern plants, 30+ offices, 10,000 retail outlets, and 2,100 service centers across 900 towns. Its product portfolio includes room ACs, VRFs, chillers, deep freezers, water coolers, cold rooms, and air purification systems. The company has also expanded into new segments such as medical refrigeration, kitchen equipment, and engineering facilities management.
Globally, Blue Star operates in 18 countries through joint ventures in Oman, Qatar, and Malaysia. Its Dubai-based subsidiary, Blue Star International FZCO, manages overseas projects and exports.
Financial Performance
Revenue grew from ₹4,235 crores in FY2021 to ₹11,968 crores in FY2025, while net income surged from ₹100.35 crores to ₹591.24 crores, with net margins improving to 4.94%. EPS jumped from ₹5.21 to ₹28.76, reflecting strong earnings growth.
The balance sheet has strengthened, with debt reducing from ₹51.01 billion to ₹38.1 billion and the debt-to-equity ratio improving from 0.51x to 0.07x. Liquidity remains strong with ₹640 crores net cash as of March 2025.
Key ratios include an ROE of 18.09% and ROCE of 27.60%, supported by an EBITDA margin of 8.04% and operating margin of 7.3% in FY2025.
Risks
Key risks include seasonal demand fluctuations, competition, high import dependence for components, and compliance with stricter environmental regulations. However, localization under the PLI scheme and R&D investments mitigate these risks.
Conclusion
Blue Star Limited emerges as a financially strong, innovation-driven leader in India’s cooling market. With robust growth strategies, strong balance sheet, and expanding global footprint, it remains a compelling long-term investment, well-positioned to benefit from India’s urbanization and rising AC adoption.
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