Advani mentioned that the unitary cooling products (UCP) sector has successfully bounced back from a sluggish beginning in 2025-26 (FY26), which was attributed to a prolonged winter and a late summer season.
Blue Star reported stagnant revenue growth in the January-March 2026 quarter owing to the delayed onset of summer. However, Advani noted a significant surge in demand starting in April as temperatures rose nationwide.
The EBIT (earnings before interest and tax) margin for the UCP division was recorded at 8.2% in FY26, while FY27 margins are projected to remain within the 7.5% to 8% range due to rising costs of copper, aluminum, and steel.
The company is also optimistic about stronger seasonal demand if high temperatures persist through June, especially as inventory levels across the industry have started to normalize following robust tertiary sales in April and May.
At 11:53 am, Blue Star shares were trading more than 2% lower on the NSE. The stock has increased by over 14% in the last month.
These are edited excerpts from the interview.Q: Let’s begin with the largest segment of your business, the UCP division. The margin expansion is encouraging. It seems certain costs have been managed well, and you’ve implemented cost efficiency measures that appear to be effective. Could you provide further details? Revenue growth is only at 1%. What led to that? Did you lose any market share? Additionally, what is the sustainable margin for the UCP division? Please elaborate.A:
Yes, you’re correct. It was a mixed quarter, but I believe we performed better than anticipated. In the UCP division, you’ll recall that the year kicked off with a substantial decrease of over 20% in top-line growth due to an unseasonably cold summer; however, we had stated at the start of the year that our goal was to stabilize revenue at the previous year’s level. We unfortunately fell short at -5% for the full year.
Nevertheless, the fourth quarter shows strong recovery. Q4 of FY25 was significant for us, and we initially expected faster growth in Q4, but ultimately we maintained flat growth. The later-than-expected arrival of summer impacted us; March had minimal summer conditions with actual rainfall. April brought a change in weather, but as far as the last quarter, flat revenue was indeed better than we had assumed given the conditions.
For the complete interview, watch the accompanying video
Regarding profitability, the EBIT margin improved for two reasons. One, we implemented price increases due to rising costs, and two, we successfully reduced operating expenses.
While we may not sustain a 10.4% EBIT in the new year due to further cost increases, we remain optimistic that FY27 will show stronger results compared to FY26.
Q: In terms of UCP, what guidance can you provide regarding growth, and if a 10.4% margin isn’t sustainable, what target are you aiming for? Also, have you experienced any market share loss?A: Concerning market share, for the entire year we gained about half a percent, bringing us to 14.25%. It has been a better-than-expected year regarding market share. Even for the quarter, we maintained our market share despite raising prices, while others postponed price hikes. In Q4, we managed to hold our market share, which is promising.
For the upcoming year, the full-year EBIT margin for FY26 was 8.2%. We expect it to range between 7.5% and 8% in FY27, primarily due to notable cost increases that you’re aware of.
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