Blue Star Limited (NSE: BLUESTARCO) recorded moderate top-line growth of 4.2% for the third quarter of fiscal year 2026 despite persistent market challenges. The company recognized a one-time exceptional expense related to new national labour codes, while the board confirmed several high-level leadership appointments to oversee future growth initiatives.
The company reported consolidated revenue from operations of ₹2,925.31 crore for the third quarter ended December 31, 2025, representing a 4.2% increase compared to ₹2,807.36 crore in the same period of the previous year. Consolidated net profit for the quarter declined to ₹80.55 crore from ₹132.46 crore in Q3 FY25, primarily due to the recognition of a significant non-recurring item. Earnings per share for the quarter stood at ₹3.92, down from ₹6.44 in the corresponding period of the prior year.
Profit Pressure
The primary driver of the net profit decline in Q3 FY26 was a ₹56.35 crore exceptional item recognized to account for the estimated impact of four new central labour codes notified on November 21, 2025. These codes, which consolidated 29 existing laws, required the company to provision additional liabilities for gratuity and leave encashment.
Executive Moves
Board approved the re-appointment of B Thiagarajan as Managing Director for a term starting April 1, 2026, and appointed Mohit Sud as Executive Director for Unitary Cooling Products. Additionally, M S Unnikrishnan joined as an Independent Director effective January 29, 2026, following the completion of Sam Balsara’s term.
Financial Performance
Operating profit for the quarter grew by 5.4% to ₹220.72 crore, resulting in an operating margin of 7.55% of revenue, compared to 7.46% in the prior year’s third quarter. Revenue from the electro-mechanical projects and commercial air conditioning segment rose 8.6% to ₹1,696.21 crore. The unitary products segment, encompassing room air conditioners and commercial refrigeration, reported revenue of ₹1,154.22 crore, a marginal decrease from ₹1,164.36 crore a year earlier. The professional electronics and industrial systems segment recorded a 7.1% revenue decline to ₹74.88 crore. As of December 31, 2025, the company’s carried-forward order book stood at ₹6,898.74 crore.
Business Outlook & Strategy
Management expects the fourth quarter of FY26 to show robust performance across the room AC, commercial air conditioning, and commercial refrigeration businesses. To prepare for anticipated growth in FY27, the company is continuing to expand its distribution network and increase capital allocation toward research and development, manufacturing capacity, and digitalization. Strategy also includes the implementation of cost optimization and productivity improvement measures to maintain margins.
Operational Update
The room air conditioner business experienced modest growth driven largely by channel partners building inventory in anticipation of the mandatory energy-label transition effective January 1, 2026. The company is also navigating a changing regulatory landscape as the Ministry of Labour and Employment clarifies rules regarding the new unified labour framework. The financial provision for these codes will be reviewed again in March 2026 as further definitions regarding wages and employee coverage are established by the government.