Blue Star Stock: What Can Investors Expect in Its Upcoming Q4 Results?

Synopsis: Blue Star is set to announce its Q4FY26 and full-year results tomorrow, with brokerages expecting improved performance supported by stronger summer demand and recovery in the room air conditioner segment. Revenue growth is likely to remain healthy, while margins and pricing execution will be key factors to watch. 

Blue Star has informed the exchanges that a meeting of its Board of Directors is scheduled tomorrow to consider and approve the audited financial results for the quarter and full financial year ended March 31, 2026. The upcoming results are expected to provide insights into demand recovery, summer season momentum, and margin trends across its cooling and air conditioning businesses. Here are the estimates from Motilal Oswal, Anand Rathi, and BoB Capital Markets. 

How Did Blue Star Perform in Q3FY26

Blue Star reported a modest improvement in Q3FY26, even as the company continued to operate in what it described as a challenging demand environment for most of the year. The key positive during the quarter came from the Room Air Conditioner segment, which returned to growth for the first time this fiscal. This was largely driven by channel partners rebuilding inventory ahead of the January 1, 2026 energy label transition, creating a temporary boost in demand at a time when other segments remained uneven. The quarter also provides an early indication of how the company is adjusting its operations, pricing strategy, and product mix to reduce earnings volatility ahead of the upcoming summer season.

In terms of financial performance, revenue from operations grew 4.2 percent year-on-year to Rs. 2,925.31 crore from Rs. 2,807.36 crore in the same period last year. EBITDA, excluding other income, increased to Rs. 220.72 crore from Rs. 209.38 crore, while the EBITDA margin remained largely stable at 7.5 percent. Profit before tax, before share of profit and loss of joint ventures and exceptional items, declined slightly to Rs. 164.66 crore compared to Rs. 167.20 crore, indicating that the increase in revenue did not translate into meaningful operating leverage during the quarter.

Net profit declined sharply due to a one-time exceptional charge related to the implementation of new labour codes. The company recognised an additional impact of Rs. 56.35 crore towards gratuity and leave encashment, in line with ICAI guidance, and classified it as an exceptional item for the quarter ended December 31, 2025. As a result, net profit stood at Rs. 80.55 crore compared to Rs. 132.46 crore in Q3FY25. Management also clarified that while this has been treated as an exceptional item for accounting purposes, the cost impact is structural in nature and will continue to influence future expenses, which is why the company is adopting a firmer pricing approach going forward.

How Are They Expected To Perform In Q4

According to Motilal Oswal, Anand Rathi, and BoB Capital Markets, Blue Star is expected to see an improvement in performance in Q4FY26, largely supported by seasonal tailwinds and a gradual recovery in demand, especially in the Room Air Conditioner (RAC) segment. Management has indicated that RAC demand has started to improve and expects a stronger fourth quarter, driven by pre-summer demand and the upcoming peak season.

A key positive for the company is its disciplined inventory management. Channel and company-level RAC inventory is currently at around 5 to 6 weeks, significantly lower than the industry average of 8 to 10 weeks. This tighter control, along with production discipline and pre-BEE transition adjustments, reduces the risk of aggressive discounting and helps protect margins, even in a weak demand environment. This also positions the company well to benefit from any demand recovery without compromising pricing.

However, the demand environment remains mixed. While RAC and cooling-related segments are expected to improve, the commercial refrigeration business continues to remain weak, particularly in FMCG-linked categories such as ice cream and cold chain equipment. Some recovery is expected in this segment during the summer season, while medium-term growth drivers remain intact. Similarly, in the EMP segment, execution remains stable, though margins have seen some pressure, and near-term growth is expected to remain in high single digits despite improving enquiry momentum.

On the pricing front, rising input costs, particularly copper, along with currency depreciation and higher compliance-related expenses, are expected to lead to a price increase of around 10 percent in Q4FY26, even after accounting for GST reductions. 

That said, risks remain in the form of weak consumer demand, intense competition, volatile commodity prices, and potential delays in project execution, which could impact margins and overall performance. While Q3 saw some support from cost discipline and controlled production, near-term growth continues to depend on demand recovery and pricing execution.

What Are The Estimates?

Building on this outlook, brokerage estimates indicate that Q4FY26 revenue is expected to be in the range of Rs. 4,292.8 crore to Rs. 4,551.7 crore, indicating a relatively narrow range of expectations on the top line.

Profitability expectations are also broadly aligned, though with some variation. EBITDA is expected to be in the range of Rs. 319.9 crore to Rs. 348.6 crore, with margins between 7.45 percent and 7.65 percent. At the net profit level, estimates show slightly wider variation. Motilal Oswal expects PAT at Rs. 210.6 crore with a margin of 4.69 percent, Anand Rathi estimates Rs. 268.1 crore with a margin of 5.89 percent, and BoB Capital Markets projects Rs. 280.4 crore with a margin of 6.53 percent.

Overall, while revenue expectations remain broadly aligned across brokerages, differences in profitability estimates reflect varying assumptions around pricing power, cost pressures, and the pace of demand recovery. The key monitorable for the quarter will be how effectively the company balances price hikes, cost control, and demand recovery heading into the peak summer season.

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