Thank you. Good afternoon, ladies and gentlemen.

It's a pleasure interacting with you once again in connection with the financial results for Q4 FY 2026 and FY 2026. You all have seen the results approved by the board yesterday, and we are here to explain the results in detail.

As you would have seen, we have more or less delivered in line with expectations, though some of you feel that we exceeded the expectations. FY 2026 was a very challenging year with many headwinds one after the other.

It started off with a weak summer season. Then we had interruptions due to GST reduction announcement on 15th of August.

Till September 22nd, the secondary sale and therefore primary sale was impacted. Post that, we had the energy label change, and connected with that, you can see the trade stocking prior to that and the trade trying to liquidate that stock.

In between, there were trade war-related hiccups all throughout the year, which still continues, which impacts us in terms of the supply chain itself on numerous raw materials that we get. One is about the availability, the second is about the prices.

As we were beginning to build up towards the summer season, you are aware of the war and the war-related impact. It's not much to do with the LPG availability of LPG pricing alone.

That's a minor one. How the supply chain overall will be impacted and the overall market sentiments that will play a role in the coming days.

We have been waiting for the summer season to take off in a big way, which indeed happened on April 13th. As we speak, we are in a great summer season.

One prays that this summer lasts for another eight weeks for managing the huge inventory in the trade and the inventory build-up that we may have, which we will deal with as a part of the questions and answers. Before that, I will pass it on to Mr.

Nikhil Sohoni for the opening remarks. Over to you, Nikhil.

Thank you, Mr. Thiagarajan.

Good afternoon, ladies and gentlemen. This is Nikhil Sohoni, and let me take you through the financial highlights for the quarter and year ended 31st March 2026.

FY 2026 has been a challenging year with multiple headwinds affecting revenue and profitability across businesses. However, demand for room air conditioners picked up towards the end of the year, helping the company to post highest ever quarterly revenue in Q4 FY 2026.

Coming to quarter ended March 31, 2026, the financial highlights are as follows: on a consolidated basis, revenue from operations for Q4 FY 2026 grew 1.3% to ₹4,072 crores as compared to ₹4,019 crores in Q4 FY 2025. EBITDA, excluding other income, for Q4 FY 2026 improved to ₹326.3 crores, EBITDA margin of 8%, as compared to ₹279.4 crores and EBITDA margin of 7% of the revenue in Q4 of last year.

PBT before exceptional items was higher at ₹282.6 crores in Q4 FY 2026 as compared to ₹248.8 crores in Q4 FY 2025. Pursuant to the notification of the labor codes as required by ICAI guidance note, the company has recognized the incremental impact of gratuity and leave encashment amounting to ₹56.4 crores for the period ended 31st December 2025 on an estimated basis, and this was shown as an exceptional item.

In the current quarter, the liability was reassessed and finalized at ₹38.83 crores, and accordingly, the provision of ₹17.5 crores has been reversed in Q4 of FY 2026. Tax expense for Q4 FY 2026 was ₹72.9 crores as compared to ₹54.8 crores in Q4 of FY 2025.

Net profit was at ₹227.2 crores in Q4 FY 2026 as compared to ₹194 crores in Q4 of FY 2025. For the year ended March 31, 2026, the financial highlights on a consolidated basis are summarized below: Revenue from operations for FY 2026 grew 3.6% to ₹12,402 crores as compared to ₹11,967.6 crores in FY 2025.

EBITDA, excluding other income, for FY 2026 improved to ₹930.4 crores, an EBITDA margin of 7.5% of revenue, as compared to ₹875.9 crores and EBITDA margin of 7.3% of revenue in FY 2025, recording a growth of 6.2%, mainly owing to overall focus on cost management. PBT before exceptional items degrew 3.9% to ₹741.9 crores in FY 2026 as compared to ₹772.4 crores in FY 2025.

Pursuant to the notification of the labor codes as required by ICAI guidance note, the company has recognized the incremental gratuity and leave encashment amounting to ₹38.8 crores. This non-recurring item is shown as an exceptional item in consolidated statement of profit and loss for the year ended March 31, 2026.

Tax expense for FY 2026 was ₹175.8 crores as compared to ₹193.6 crores in FY 2025. The effective tax rate was 25% for FY 2026 as compared to 24.7% for FY 2025.

Net profit for FY 2026 degrew to ₹527.3 crores, 4.3% of revenue, as compared to ₹591.3 crores, which was 4.9% of revenue, in FY 2025. The board of directors of the company have recommended a dividend of ₹8.5 per share.

Last year, the dividend was ₹9 per share. Carried forward order book as of March 31, 2026, grew by 10.5% to ₹6,923 crores as compared to ₹6,263 crores as of March 31, 2025.

The capital employed as of March 31, 2026, increased to ₹3,258 crores as compared to ₹2,427 crores as of March 31, 2025. Net cash position was at ₹175.5 crores as of March 31, 2026, as compared to net cash position of ₹640.3 crores as of March 31, 2025.

Coming to business highlights: for electromechanical projects and commercial air conditioning, that is Segment 1, the Segment 1 revenue grew 1.1% to ₹1,989.9 crores in Q4 FY 2026 as compared to ₹1,968.2 crores in Q4 FY 2025. Segment result was ₹128.5 crores, which was 6.5% of revenue in Q4 of FY 2026, as compared to ₹149.9 crores, which was 7.6% of revenue in Q4 of FY 2025.

Segment revenue for the year grew 12.8% to ₹6,762.8 crores as compared to ₹5,998 crores in FY 2025. Segment result was ₹501.9 crores, which was 7.4% of revenue in FY 2026, as compared to ₹490.9 crores, which was 8.2% of revenue in FY 2025.

Order inflow for the current quarter was higher by 35.7% compared to corresponding quarter of FY 2025, which was ₹1,954.39 crores in current quarter versus ₹1,439.9 crores in quarter four of last year. Coming to electromechanical projects business: Q4 FY 2026 saw strong inquiry momentum for buildings, data centers, and factories, with bookings growing 35%.

Order inflow for the year was lower by 10% compared to FY 2025 as the order inflow was sluggish in previous quarters. The carried forward order book of electromechanical projects business was at ₹4,664.5 crores as of March 31, 2026, as compared to ₹4,755.2 crores as of March 31, 2025.

Coming to commercial air conditioning systems: the commercial air conditioning business gained momentum during the quarter, supported by healthy demand from the government, industrial, and retail segments, while the bookings from office, education, and IT sectors remained subdued. The revenue growth in ducted systems and chillers during this quarter has been good, and VRF is showing steady progress.

We remain confident in the medium-term prospects of the business, with steady growth expected across key product categories. International business, which also forms part of this segment, the geopolitical uncertainty, including tariff-related uncertainties, persist.

The future prospects of the US business is highly dependent on the outcome of the India-US trade deal. However, despite this headwind, our foray into US is progressing well.

Our supplies to Europe has also commenced, and we remain optimistic on the prospects for this business. On account of the change in the project mix and the entire business mix within the Segment 1, the margins were lower at 6.5% of the revenue in Q4 of FY 2026 as against 7.6% in Q4 of FY 2025, and the margin for FY 2026 year as a whole was 7.4% as against 8.2% in FY 2025.

Coming to Segment 2, that is unitary products: the revenue grew 1.3% to ₹1,985 crores in Q4 of FY 2026 as compared to ₹1,960.2 crores in Q4 of FY 2025. Segment result was ₹206.9 crores, that is 10.4% of revenue in Q4 of FY 2026, as compared to ₹164.5 crores, which was 8.4% of revenue in Q4 of FY 2025.

Revenue for the year degrew by 5.1% to ₹5,332.4 crores in FY 2026 as compared to ₹5,621.1 crores in FY 2025. Consequently, segment result declined to ₹434.8 crores, which was 8.2% of revenue in FY 2026, as compared to ₹471.3 crores, which was 8.4% of revenue in FY 2025.

Within Segment 2, the room air conditioner business witnessed reasonable growth, with primary demand picking up in March and channels across all regions stocking up for the summer. The dealer network expansion continues to progress as planned.

Despite the multiple challenges, we gained market share marginally during the current quarter. Quite a few cost rationalization measures taken in Q1 FY 2026 owing to poor summer season continued till the end of the financial year, and it resulted in improved margins for the quarter.

Commercial refrigeration business: due to muted demand from frozen food and QSR segment throughout the year, the market for deep freezers and cold rooms remained stagnant. However, storage water coolers witnessed double-digit growth driven by strong demand from government and corporate sectors.

Due to delayed onset of summer season, advertising and field marketing campaigns had not commenced in March 2026. This, combined with prudent pricing and other cost optimization measures undertaken since April 2025, resulted in improvement of segment margins to 10.4% in Q4 FY 2026 as compared to 8.4% in Q4 FY 2025.

Coming to Segment 3: the revenue grew 7.3% to ₹97.18 crores in Q4 FY 2026 as compared to ₹90.56 crores in Q4 FY 2025. Segment result was ₹14.3 crores, that is 14.7% of revenue in Q4 FY 2026, as compared to ₹8.8 crores, which are 9.7% of revenue in Q4 of FY 2025.

Segment revenue for the year degrew by 12% to ₹306.8 crores as compared to ₹348.6 crores in FY 2025. Segment result was ₹34.9 crores, which was 11.4% of revenue in FY 2026, as compared to ₹29.7 crores, which were 8.5% of revenue in FY 2025.

The uncertainties around the regulatory policy framework pertaining to medtech solutions business are yet to be resolved, and consequently, the business has slowed down. However, the industrial solutions business continued to grow, driven by strong demand in automotive and steel industries, and the data security solutions business maintained steady performance.

Coming to business outlook: from the second week of April 2026, summer had set in and secondary sales of room air conditioners have picked up momentum. Driven by encouraging demand from manufacturing and data center sectors, electromechanical projects and commercial air conditioning business segment is expected to maintain growth momentum.

With rising input costs and volatile exchange rates, there will be challenges in managing the margins. Further, the ongoing Middle East crisis can lead to supply chain disruptions and also dampen growth.

We remain cautiously optimistic about the prospects for FY 2027. With that, I would now like to pass it back to the moderator, who will open the floor for questions.

We'll try to answer as many questions as we can, and to the extent we are unable to, we'll get back to you via email. Thank you.

Thank you. Good afternoon, everyone.

I have three questions. First, in terms of UCP, RAC being a hypercompetitive market requires constant ad and promotional spend.

Could you throw some color in terms of your strategy that are you now protecting margins or will we see elevated ad spend later in the year? If you're protecting margins, will that impact our volumes?

Second question, in terms of April, what we observed was first 15 days is pretty much flat because of rains. Second 15 days, only secondaries have picked up, it seems.

Primary, either the channel is pretty much stocked in South or people do not want to stock because of the erratic weather condition. With that background, could you tell us how are you reading near term, given that season will probably end towards the end of June?

Lastly, given cost has increased so much, are you seeing a very sharp downtrading happening? Because what we're seeing is lower-tier brands are gaining market share at the cost of all higher ones.

Any color on that will help. Thank you.

Thank you. The first question is connected with advertising and marketing.

If in March 2024, we were anticipating a great summer season. Even the IMD weather forecast said so, and the dealers were stocking anticipating the compressor shortage in a big way.

In Q4 of FY 2025, there was huge advertising that took place, and subsequently, it is very difficult to correct. Say, for example, on IPL and all, you would have made a huge commitment.

You would have bought a media. When the summer failed, we suffered.

Few things could be corrected. That's about all.

Significant amount of marketing spends were there. In Nikhil's remarks, what he meant was, actually in Q4 of last year, that is FY—I'm not talking about FY 2026, FY 2025—there was huge advertising spends.

In Q4 of FY 2026, we were clear about it because summer had not set in. Summer set in actually on April 13th only.

Therefore, in Q4, in preparation, specifically ending end of February, March, these spends were very low. This includes also many in-shop promotions like in-shop demonstrators, on and so forth, which we are stepping up post the onset of summer season.

See, other advertising happens in some measure for overall brand visibility, and the real advertising for room air conditioners, including tactical, is indeed a function of how the demand in the market plays. Again, during the festive season last year, there was a GST announcement, and it was not picking up.

Onam or subsequent period, we had to call it off. That's how it works.

There is no intent to stop our investments, which is in the order of around 1.5% to 2% of our products business revenue. That's what is the advertising, brand building, field marketing expenses.

That will continue depending on the demand. If there is a extreme situation like that, we will do.

It will not affect, because if the summer itself has not set in and you go and keep advertising, sale is not going to happen. Because you have not advertised despite that, it is not that your brand image is eroded.

That we are very conscious about that. The second question is connected with the weather.

I told you, April 13th, the summer season has set in, and it has taken off well from April 13th, and obviously you have to wait for the dealer field inventory to get liquidated. They had bought inventory in December because there was a energy label change.

Post that, they know the prices will keep going up, and they stocked up. Indeed in February and March, they would have bought it because they know the price increase have been announced, and the new material that will go into the market will be at higher prices.

Whether the secondary, tertiary movement or whether it is primary pickup, it is now clearly the function of how severe the summer will be and how long it will last. The question here is another six weeks whether summer will be active.

As we speak, the primary movement has commenced already in many markets, and we have to wait and see. In one single sentence, we are happy that the summer season has set in.

We are not celebrating like it was 2024 summer. We have still two, three weeks to go to assess how it is going to pan out.

Your third question is part and parcel of that. The function of the increased cost to be passed on is again dependent on the demand in the market.

Thank you.

Thank you, sir. All the best.

Hi, sir. Thanks a lot for taking my question.

My first question is with respect to the—

Is it better now?

Is it better now?

My first question is with respect to the price increase in air conditioners. How much amount of price increase you would have taken since January 1st, including the BEE norm change?

How much more needs to be taken to compensate for the raw material price increase that has happened?

We have stated this in many media interviews of mine. It will be there.

It varies from SKUs to SKU. It is around 5% is the price increase on account of energy label change alone average.

Subsequent to that, till the April beginning, it will be around 8% for the raw material price increase and the exchange rate, all put together. It should have been around 13% price increase that is warranted.

Very well, again, I'm repeating, the inventory was built up. The primary sale is beginning to pick up.

Far, whatever primary had happened, we would have realized up to 8% out of 13% price increase. 5% more percentage of increase will happen as the May, June billings are happening.

That is the reality. It may vary from model to model.

On the average, you can assume it to be so.

Is it completely enough to cover the cost inflation which is there and protect the EBIT-level margins for the cooling product segment?

13% will cover the desired margin levels.

Got it, sir.

Here again, it does not take into account going forward what cost increases will be there, like what has happened now post-war is the plastic petroleum-based input cost, like, for example, styrene, polystyrene, all those costs will go up.

Got it. With respect to the projects business also, in terms of raw material prices going up, some of the projects might be fixed-price contract.

How to think about any margin impact that can happen in the next 12 months because of the raw material price increase and currency depreciation that has happened?

I don't think we have any fixed-price contract. Rarely they will be.

It's all covers for the price variation. Having said that, if you have delayed or the delay is attributable to us, during the delayed period, price variation will not be applicable.

I do not think we have any kind of an impact at the moment in terms of input material cost has gone up. See, how it works is that you always assume that price variation will provide for something and there is some contingency that is available.

That is not the major concern there.

Got it, sir. Thanks a lot.

Hi, sir. Very good afternoon.

Thank you for the opportunity. Sir, three questions.

Firstly, on the international business, if you could just provide some color on what's the one-year outlook and a three-year outlook in terms of new customer approvals and the growth you see, the revenue potential there? Second question was qualitatively if you could talk about the growth outlook for fiscal '27 on commercial AC, commercial ref, and projects?

Third one on the balance sheet, just wanted to know what's changed for the payable number? I'm assuming that there is a bit more inventory stocking and hence the creditors actually look like maybe you've paid in advance and hence they dropped down considerably.

Just if you could explain that in terms of what's the change there? That's all from my side.

Thank you.

The international, it is a wrong time to be talking about long term. Honestly, many trade deals they are taking off, they are in the verge of signing, and huge uncertainties prevail.

All that I can say is that we have approval for quite a few of products with quite a few of customers, and these are connected with air-to-water or air-to-air heat pumps. As far as United States is concerned, you may have read already, the US market is stagnant or it is degrowing for our customers.

Correct? The HVAC market there was doing not that great last year.

Now with many other economic factors there, that is likely to slow down. That is the information we have got.

Having said that, we are new entrant. Even if I sell 100 unit, it is a growth for us.

It is an additional market. The trial marketing or the validations and all that continue to go on.

Today, that is not a very, very significant part of the business. We have approvals, acceptance, and even customer preferences for quite a few products for quite a few OEMs in this market.

That's where it is. Europe, it has been slow, it continues to be slow, but now with the new energy security, the countries are beginning to insist that the people should begin to use heat pumps rather than the boilers.

That's where we are. Now, we had mentioned repeatedly that it is a very important and critical portfolio for Blue Star.

It may not contribute significantly to the revenue, but in about three years, depending on how the global economy is going to pan out, we should be beginning to grow that business significantly. In all this, Blue Star is not entering with its own brand.

Blue Star is not acquiring any brand from those markets. Blue Star is not setting up any joint ventures there.

It is Blue Star making products for others as a CDM manufacturer. That is our strategy.

The second part, commercial refrigeration business, again, to a very large extent, like quite a bit of cooling for frozen food, it is dominated by the ice cream segment. The last FY 2026 was a bad year.

FY 2027, we have to wait and watch. It all depends on how the ice cream retail network is expanding, and that significantly impacts this business.

Pharma or other sectors are very, very minimum. We are not into fresh produce-related like packhouses or vegetable, fruit processing.

We are not into that. Though those are large EPC contracts.

In the modular cold room business, or the modular refrigeration products, it is somewhat muted market. In any case, for you all, we are talking about a ₹35,000 crore plus room air conditioner market versus ₹5,000 crores of commercial refrigeration market, which is addressed by Blue Star.

This is one particular segment which has a huge growth potential, but it is yet to grow. What was your third question is about— If you

could comment on the commercial AC and the project segment growth outlook on revenue for fiscal '27?

In commercial air conditioning, again, last year, it was impacted by the multiple factors, including GST in some way. The outlook continues to be around 8% to 10% kind of growth, and the growth is today driven predominantly by manufacturing sector.

In case of projects, it is driven by manufacturing as well as the data center. In both these segments, we are market leaders, we continue to do well.

To give a rough idea that the data center MEP part of it, where we are leaders, we would estimate the market size to be somewhere around ₹3,500 crores, and we do a business of around ₹1,000 crores there. This is likely to more than double within three years, going by the inquiries in hand and going by the order finalization speed that is there.

Therefore, that MEP part of that ₹1,000 crore has the potential to go to ₹3,000 crore within three years. Roughly 15% of Blue Star's revenue may be coming from data center MEP business alone.

That is the outlook there. The sunrise sector is that.

In manufacturing, it is connected with semiconductor, EV, battery, solar cells. These are the segments which require air conditioning and expert cooling solutions, and we continue to do well there.

Quite a bit of orders are under execution, quite a bit of orders are on the anvil. Here again, this will be next three to five years, that is going to be growing tremendously.

Both in commercial air conditioning and electromechanical projects, while buildings or infra projects like airports, metro, this will continue to happen. A very attractive part of that segment is attractive in the sense it is financing, there is no worry.

Cash flow, there is no worry. These are very fast-track projects.

9 to 10 months you have to complete, and these kind of projects are very attractive to us. This is where we will bet on.

Blue Star is not having the complete range of data center cooling equipment. We are leaders in MEP part of it.

We have a few chillers, but if you have to talk about the CDUs, which are cooling distribution units, liquid cooling, and that particular space, we are on the lookout for a technology. We are discussing with many partners, but nothing material as of now.

Thank you. Sir,

just to clarify, you said—

Okay. Thank you.

Thanks for the opportunity. Sir, if you can share any outlook for the air conditioner industry as well as Blue Star for FY 2027, considering there is a extremely favorable base of FY 2026?

Secondly, whether the excess trade schemes like free installation or higher in a way discounts for the trade, whether all of them have been discontinued? At the same time, commodity prices have increased.

Considering all these things, what will be the outlook for margins as well? Question number two.

Last question: in terms of now Blue Star has solid market share in air conditioners and in a way connect with dealer, distributor, manufacturing capabilities, is there any plan to enter other products in a way either white goods or durables like washing machines, refrigerators, or any other matter for that matter? Because if AC penetration reaches a very good level in FY 2030, what will be the key driver beyond that?

I guess the seeding will have to be done now for the growth to be seen maybe after FY 2029-30. These are the questions.

Your first question is about industrial air conditioning?

No, sir. Air conditioner industry, sir.

Overall RAC industry.

Room air conditioner industry, given the penetration, it will be the fastest growing market in the world. I still maintain by 2030, it should more than double.

The CAGR at 18% to 20% should happen. There may be a year with lower growth, there may be a year with very high growth, and one more summer season may get washed out in the coming years.

All that apart, the outlook is very, very encouraging. This is for the growth of the industry.

What is today around perhaps FY 2026, let us say, it is going to be 17.5 million units. I will not be surprised many things happen, and it ends up with 40 to 50 million units by FY 2030.

It has the potential. It can happen.

What I am not very sure is whether it is an industry which, given the number of players, the increasing competition, and increasing investment in manufacturing capacities, whether it will provide that 8% to 9% of operating margin. The question will be the margin will be under extreme pressure.

It is again a function of how rapidly the demand builds up and what is going to happen to the commodity prices, specifically copper and other electronic components. This is what is the thing that the industry players will have to look out for.

Just because the market is growing, it is not necessary that the margin will expand. It will continue to be under pressure.

That is the outlook for the industry. Commercial air conditioning industry is a steady growth.

It's a function of many infrastructure getting built. There the penetration level is higher.

It is urban-centric, but you see more and more Tier 3, 4, 5 towns having air-conditioned restaurant or air-conditioned marriage halls or air-conditioned hotels, hospitals, on and so forth. It will coincide with the construction cycle and the infrastructure development.

We are market leaders there. The competitive intensity is not that high like room air conditioner, but you do have the technology-related changes, the product innovation cycle or the time it takes to develop those products like VRF.

Today, it is advancing very rapidly because energy efficiency requirements, reliability requirements, automation requirements are very high in that particular part. Unlike United States, in India, the residential air conditioning market size is very big.

It is more than ₹35,000 crores, and still we are dealing with something like ₹5,500 crores market in commercial air conditioning. That's where it is.

EPC part of the market is huge. It will continue to grow.

There, then the question is there you are able to protect your margin, there you are able to protect your cash flows, that is what we are focused on. We are not chasing the market share.

We have repeatedly stated this. Where the expertise is paid for or you are getting sufficient returns for the expertise that you have built in that particular domain.

Today, it is manufacturing and data centers, and some other point of time, it may be something else. It will continue to grow because these two sectors, India is reinventing itself and it is attracting a lot of investment.

The margins outlook, given the commodity prices, it is a wrong time to predict anything because when you are in adverse situation, you swing to the other extreme. It is bad.

You don't have any visibility at all whether it is exchange rates or whether it is the commodities. As we speak, they say that there will be huge shortage of electronics because of helium-related issues.

It is unfortunate that we are in that situation. That you have to deal with quarter-to-quarter.

Right now, we are focused on how to ensure that our prices or our price realization is in line with the cost increase that has already taken place. Once this quarter ends, there will be additional input costs increase if the war is not ending.

That's where we are.

Okay. Sure, sir.

This is very helpful. The last question on entering other

No. I had already asked the question, the entry in possible other products like refrigerator, washing machine.

We have, as on date, foreseeable future, we don't have any such plans at all. We will be focused on air conditioning and refrigeration.

There will be geographical expansion, which we have begun, and India itself is a very high-growth market. We have no plans whatsoever to get into white goods.

Okay. Sure, sir.

Very helpful. Thanks.

Sir, thank you for the opportunity. Sir, I have the following questions: firstly, what is the inventory level in RACs right now versus the start of this year, say January '26?

Secondly, the quantum of price hikes is definitely required to cover up the margins, but in your view, do you think it will lead to a demand destruction industry-wide, not only limited to Blue Star? Thirdly, your capex and FY '27 outlook in terms of revenue or margins, please.

Thank you.

The last part, Nikhil will deal with. The inventory level will be reasonable as of now.

The question is that the dealers have to begin stocking. Already March huge billing took place.

April 13th onwards, it is selling in the secondary, tertiary very well. My estimate, as on date, if you ask me, it would have come to a reasonable level, which means around 45 to 60 days of inventory should be there.

If the summer is active, this 45 to 60 days of inventory should get exhausted even within 20 days of time. That is how it should happen.

I do not think today the inventory of a company or Blue Star is an issue at all because it is locally manufactured, you can regulate it in particular manner. The challenge is that to monitor how much is moving out and how much will be the primary billing and how I will moderate the production.

That's where it is. As of now, that is not the concern.

The concern is connected with how the pricing will be passed on to the consumers. I cannot talk about other brands.

In our case, it is very important for us to pass on the increase. It's not that we operate with huge margins.

It is very important that the margins are in the order of, again, for segment revenue I am saying, the Segment 1, we want to continue to maintain that 7% to 7.5% outlook. Segment 2, we want to maintain 8% to 8.5%, okay?

That's where it is. Now, at the same time, we have to march towards our market share goal of 15%, which is currently at around 14.25%.

This is a function of how long the summer will be active, how much price realization can be improved. This is a very critical period to judge that.

Now, the consumer demand will drop, it is again if the summer is active, it's not going to be. As I have told you that let us say last year to this year 13% price increase, but there is a 10% GST benefit.

Actually, the consumer is going to pay around 3%. That's where we are.

I am not very sure the offtake will be reduced because of this price increase. I am not seeing that if the summer is going to be harsh.

The issue will be, due to the war, let us say tomorrow the petroleum prices are increased or diesel prices are increased and the inflation peaks during this period, consumer sentiments may force the consumers not to spend. That can happen.

I am not able to comment on that, but I know for sure that the consumer sentiments will dramatically change if, say for example, petrol prices are going up or diesel prices are going up. This 3% net of GST increase may not pull down.

Probably a five-star buyer will end up buying a three-star or somebody in high-end five-star may end up buying a normal five-star, and one may end up buying a brand which has priced it cheaper. All that can happen.

I don't think they will postpone the purchase for this particular aspect. Thank you.

Sorry, Nikhil, about the balance sheet and capex.

Sure. Can you hear me?

Yes, sir.

Yeah. With regards to capex, see, our annual capex can be anywhere in the region of around ₹250 to ₹350 crores.

That's the normal spend that we have, and when I say this capex, it includes all types of capex, that is the normal routine capex, maintenance capex, your investments in R&D, product development, as well as whatever digital investments that we will be doing. All of that will be in that region.

As regards what growth we can expect for the next year, FY '27, I think it is too early to comment. You already heard Mr.

Thiagarajan that summer is just set in, and we would like to wait and watch because it entirely depends on how the summer actually plays out for the year.

The margin outlook?

The margin outlook, what we have said already again, that, it's given the cost pressures that we are having in terms of commodity pressures that are there and the limited kind of way in which price increases can take place, there is going to be margin pressure this year. The headwinds are going to be there.

Got it, sir. Very helpful.

Thank you, and all the best to the team.

Hi, good afternoon, sir. Sir, given that you pointed out out of 13% kind of a price increase that was required, around 8% has been taken so far, does that mean that in Q1, we are likely to have margin pressure, and the margins hopefully then recover through the course of the year if commodity costs cool off?

If commodity costs stay where they are, then the impact of higher plastic pricing and other crude derivatives is yet to hit us, that starts hitting us from quarter two onwards?

Aditya, I have stated very clearly the additional price increase has come into effect in May itself. We have to pass it on.

It is a function of the secondary demand, then the dealers will have to buy it. That's where we are.

We are also stating that there will be margin pressure throughout the year. Unless and until something dramatically changes in Q2 or Q3, we do not know.

We are still maintaining that 8% to 8.5% is the outlook for the margin.

Sure, sir. We are still aiming for 8% to 8.5% kind of UCP margins this year, in which case—

As we stand today.

Understood. There are cost pressures, but we feel fairly confident that we should be able to pass those on.

Is that understanding correct?

That's right. In a good summer year, it should be 8.5% to 9% for your information.

We are saying 8% to 8.5% should be the thing. In my very opening remarks, or after the first question, I have stated the market will continue to grow, the margins will be continuing to be under pressure till 2030.

I'm not seeing that this 8% to 8.5% continuing as the market expands further and further. That also I have

stated, but

as far as this financial year is concerned, as we see today, we believe 8% to 8.5% is possible.

Understood. All the costs that have gone up since the war broke out, those costs are yet to get reflected in this 13% kind of a price increase that we spoke about.

Is that what you would—

Yeah.

Understood. Plastic pricing further goes up.

Yeah.

Sure. That's clear, sir.

Thank you so much.

Sir, thank you for taking my question. Just one question.

You spoke about ₹3,500 crore cooling opportunity right now for data centers, out of which you can do ₹1,000 crore as a MEP contractor. Can you highlight of those ₹1,000 crore, how much equipment can we source internally?

No,

these are MEP contracts. These equipment, if you're talking about cooling equipment, it will not be there, it will be negligible.

Equipment market is completely separate.

Sure. Basically, as a contractor, we can do about a thousand, we are doing ₹1,000 crore, which is a third of the market.

There will be material. Those material will be something like a busduct or sheet metal, insulation, such things.

It is not connected with cooling.

Very clear, sir. Thank you so much.

Thank you.

Hi. Thank you for the opportunity, sir.

Two questions from my side. First, on the RAC business for the unitary cooling, can you help us with the volume numbers for fiscal '26 and at what utilization levels are we sitting at our factories?

Second is on the MEP portion of the business where you highlighted data centers and manufacturing as key growth markets. These are also sectors where typically customers or one would presume the pricing environment is relatively favorable.

Just trying to understand, in these segments, especially data center kind of market likely to double up in the next two to three years, any reason why we are still expecting margins to be at 7%, 7.5% levels only and not expecting the project margins to improve as the quality of projects that we are executing on the core HVAC side or the MEP side are also improving?

The last part I'll answer. It is not our portfolio is only manufacturing and data centers.

We do have buildings, we do have infra projects. It's a blended margin we are talking about.

Your other question is that, my estimate is that the market would have been anyway, we don't know the final numbers of the market. It should be somewhere around 15.5 million or something like that.

We have always said that in volume terms, we will be somewhere around some 11% of the market we will be. Now, as far as the Segment 2 margins are concerned, I am saying that we are at a juncture where we have to necessarily pass on the cost increase.

If it is not passed on now, it will be even more difficult later because this is the time the increase will look like only 3% over last year. The more you delay, it will look like that we are increasing over.

Correct? There is a justifiable reason for this.

I suppose I have answered all your questions.

Sure, sir. My perspective was that if data center is growing at almost 40%, 50% CAGR for you and its share in the project business would increase from current 15% levels to close to 20%, 25% three years out, should that not have a positive tail effect on the segment profitability when we look at the blended numbers for the company?

No, within the segment, it is at 33%. Within the segment, okay, data center.

I mentioned if Blue Star's revenue will be ₹20,000 crore, it will be ₹3,000 crore. In that context, 15% of the company's revenue could be.

Do not mix up with that statement with this. Within the projects business, there are data centers, there are factories, there are buildings, there are infra.

Now, in that particular business, we have been operating between 7% to 7.5%. I will not at this juncture say that is going to become some 8% to 8.5% or 8.5% to 9%.

It is true that the data center market will grow and that part of the business will be significant within that segment. We are not making a statement I am not going to be in buildings or I am not going to be in other verticals.

As of now, that is all the guidance that we are giving.

Got it. The average utilization levels for our RAC facilities?

I want to remind that Sri City Himachal is built in such a manner that it is operating at full capacity, okay? Whatever little we can improve, we keep improving, but otherwise, it is operating at 100% capacity, which is somewhere around 6.5 lakh units.

The balance out of our something like 1.6 million comes from Sri City factory. Not exactly 1.6, it will be something like It is not 1 lakh, it will be somewhere around 9 lakh units because we also buy window air conditioner and few SKUs from outside.

Sri City is built in the module of 3 lakhs. So 3 lakh became 6 lakh, 6 lakh became 9 lakh.

This 9 can become 12, and therefore, this capacity is added in line with the market requirement. Today, if we are saying this year the growth will be good, it will be operating close to 100% capacity.

We will be deciding by October to expand one more line. The factory is built in such a manner, the building is available, it is the assembly line that we need to invest.

What we were to invest last year, we said that we will postpone and look at it in October. In October, we will go ahead and take that call.

Therefore, the answer is it is operating close to 100% capacity in room air conditioners or commercial refrigeration.

Perfect. Thank you, and best wishes to the team.

Thank you.

Good afternoon, sir. Thank you for the opportunity.

I just wanted a clarification with respect to the industry size. Did you mention from a fiscal year FY '26 perspective 14.5 million pieces for the industry, sir?

No, I didn't say. FY 2026 will be somewhere around 15 million only, and I think it should be 17.5 for FY 2027.

I also mentioned FY 2026 final figure, I do not know what it is. It should be in my view, it should be close to 14.75 or 14.5 to 14.75 because it would have degrown only by around 5% in volume over the previous year.

Our market share is 11.25%, like what you said, in volume terms, and value terms 14.25%. Have I understood right, sir?

That is right.

Got it. The second question I had was with respect to, given where we are currently, you said the season actually started only on 13th of April properly.

What is it typically when it starts according to you? What kind of delay we've had seen?

Do you think the way the weather is progressing, we could have really an extended summer season, particularly for South?

It has happened in the past like that, but the question is whether patterns have completely changed. It is just impossible.

You have to keep your fingers crossed. Only good news is that the forecasts one week prior to that is becoming much more accurate.

The delayed monsoon means it may be instead of January first week, it is setting in by January, instead of June first week, it is setting in by June 15th. It's not that it is going to get delayed to July or something like that.

Again, I'm stating, if it is going to be a disastrous monsoon, it will have other consequences actually. It is again not worth praying for that as well.

All that one should look forward to is rest of May and first half of June if the summer is active, and perhaps in few pockets of North till June end, that is good enough.

Understood. Just a clarification on the 4Q UCP margins, fair to say that there is an element of the provision reversals and the lower cost which has improved the margins?

What provision reversal, I am not able to follow.

Labor code provision, the final assessment and the reversal of that ₹17-18 crores.

No, that is in the exceptional item. Provision was made in the exceptional item, provision is taken back in exceptional item.

There is no provisions out there.

Understood. Thanks for the clarification, sir.

Thank you so much.

That is not going to business also.

Got it, sir. Noted.

Thank you so much.

Hi. Hello, am I audible?

Most of the questions on MEP side has been answered, but just want some clarification on that. In overall data center project, as you said, we are providing chillers, and for the CDU side, we are doing some partnership.

How much is the in-house products, and how much it is the outsourcing in the MEP side?

Chiller, as you

said, we are the market leader.

In MEP of data centers, we do not have any cooling equipment at all. It is all electrical or mechanical equipment, okay?

Cooling equipment is bought always separately by a data center provider, okay? In that cooling equipment business, we do not have the complete range.

We have few chillers. We do not have CDUs.

We do not have fan wall units, for example. This we are in the process of developing or making partnerships.

The MEP part of it, it is broadly the electrical, mechanical. Actually, again, main electrical equipment will be bought by them separately.

Okay. What about the order book size in that segment, MEP side, for the data center?

I told you that we estimate the market to be anywhere between ₹3,000 to ₹4,000, and our order book will be somewhere around ₹1,500 crores.

₹1,500 crores.

I'm saying at any given point of time. You're talking about the order book, right?

Yes.

Broadly translate into annual revenue of around ₹1,000, but the inquiry inflow is very huge, very big numbers.

Okay. Sure.

Thank you.

Thank you. Just one question that because of this stocking that you mentioned in quarter four, should we expect lag for at least in quarter one between the primary sales and secondary sales so you can get the inventory situation?

I don't think so. The April, that statement may be true.

Today, the primary sale is beginning to pick up.

Sure.

Your statement may be true for April. Generally April first week itself, it should start.

It didn't, and it began only in May first week.

Understood, sir. Sir, thanks a lot.

All the best.

Thank you for the opportunity. Just one question, sir.

If the summer progresses as the way it is progressing right now, what is the kind of primary sales that we can expect on the last year's base, if you could give us a growth number?

I've always stated that given there is a price increase of I'm saying average you take at least 10% over last year, a good performance would mean anywhere between 25% to 30% over last year.

Will that result Yes, sir.

I'm saying that over last year Q1 for the industry, if it is a 25% growth, that means it is a very good summer. That's what one will have to imagine.

Imagine, last year summer was not a great summer,

and

25% because in that 15% is the real growth, some 10% is arising out of the price increase. That's what it is, and it looks like there is a probability that it will happen.

Again, it's a function of summer.

Sir, just adding to that part, if it pans out as the way the expectation is, then at the end of Q1, are we going to be sitting on a lower inventory versus what we were sitting last year? Is that our thought process right?

Yes. The inventory adjustment even last year was not that difficult.

The problem last year was that it was compounded by one factor after the other factor. You are starting with an assumption there will be shortage of raw material, and therefore, you'll produce.

Then the weather forecast says that weather is going to become hotter by April 15th. April 15th, it says May will become hotter, and it continued like that.

Then the next part of it is that the festive season was completely dampened. Then you got into energy label change, what will happen to old inventory, new inventory.

Those are all the issues there. I am saying inventory management of the industry and Blue Star will be far better this year, because if the moment summer has not set in, people have moderated the production, and they know very well that we have to wait for a lag in the primary sale.

It already happened. Now they will be moderating what is the production and what is the sale that is happening.

I don't think that will be the concern at all. I'm again repeating: the issue will be how to pass on the price increase fully now and how to pass on the price increase post the season.

There will be war-related increase in costs. This year will be about margins rather than inventory.

Thank you, sir.

Thank you very much, ladies and gentlemen. With this, we conclude this quarter's earning call.

Do feel free to revert to us in case of your questions are not fully answered, and we'll be happy to provide you additional details by email or in person. Thanks.