BLUE STAR LIMITED ANNUAL REPORT 2024-2025
Forward-looking Statements Certain statements in this report regarding our business operations may constitute forward-looking statements. These include all statements other than statements of historical facts, including those regarding the financial position, business strategy, management plans, and objectives for future operations. Forward-looking statements can be identified by words such as ‘believes,’ ‘estimates,’ ‘anticipates,’ ‘expects,’ ‘intends,’ ‘may,’ ‘will,’ ‘can,’ ‘plans,’ ‘outlook,’ ‘continue,’ ‘could,’ ‘likely,’ ‘objective,’ ‘propose,’ ‘seek to,’ ‘will pursue,’ ‘will likely,’ ‘will achieve,’ and other words of similar meaning in connection with a discussion of future operational or financial performance. Forward-looking statements are necessarily dependent on assumptions, data, or methods that may be incorrect or imprecise and may not be capable of being realised. As such, they are not intended to be a guarantee of future results, but constitute our current expectations based on reasonable assumptions. Actual results could differ materially from those projected in any forward-looking statements due to various events, risks, uncertainties, regulatory changes pertaining to the industries we cater to and our ability to respond to them, our ability to successfully implement our strategies, the performance of the financial markets in India and globally, changes in industry competition, and incidence of any natural calamities, global warming, and/or acts of violence and other factors. We neither assume any obligation nor intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We cannot assure our stakeholders that the expectations reflected in these forward-looking statements will prove to be correct. Given these uncertainties, the stakeholders are cautioned not to place undue reliance on such forward-looking statements and not to regard them as a guarantee of future performance.
Blue Star Limited
Contents Statutory Reports Board’s Report 96 Corporate Governance Report 124 Management Discussion and Analysis 154 The Dynamics of Blue Star’s Growth 160 Business Responsibility and Sustainability Report 161 96-208 Introduction Letter from the Chairman & Managing Director 08 Board of Directors 12 08-19 Integrated Report Company Overview 20 Business Segments 24 Industry Structures and Segments 26 Wide Range of Products 28 Prestigious Installations 34 Expanding Global Presence 38 Enhanced Value Creation 40 Financial Capital 42 Manufactured Capital 44 Intellectual Capital 50 Human Capital 56 Relationship Capital 58 Social Capital 62 Natural Capital 66 Information Technology 70 Brand Equity 72 Awards and Recognitions 76 Risks and Mitigation Strategies 80 Strategic Planning and Development 84 Ample Opportunities 88 ESG Practices 90 Geographical Outreach 95 20-95 Financial Statements Independent Auditor’s Report on Consolidated Financial Statements 209 Consolidated Balance Sheet 218 Consolidated Statement of Profit and Loss 219 Consolidated Statement of Changes in Equity 220 Consolidated Statement of Cash Flows 221 Notes to Consolidated Financial Statements 223 Independent Auditor’s Report on Standalone Financial Statements 303 Standalone Balance Sheet 314 Standalone Statement of Profit and Loss 315 Standalone Statement of Changes in Equity 316 Standalone Statement of Cash Flows 317 Notes to Standalone Financial Statements 319 209-394 For more information, please scan the QR code or visit our website: https://www.bluestarindia.com
Blue Star Limited BOARD OF DIRECTORS COMPANY SECRETARY & COMPLIANCE OFFICER REGISTERED OFFICE AUDITORS BANKERS REGISTRAR & TRANSFER AGENT INTERNAL AUDITORS Vir S Advani Chairman & Managing Director B Thiagarajan Managing Director P V Rao Executive Director - Projects, Solutions, and International (with effect from August 7, 2024) Non-Executive Directors Rajiv R Lulla Sunaina Murthy Dinesh N Vaswani Independent Directors Sam Balsara Anil Harish G Murlidhar Anita Ramachandran Arvind K Singhal Vipin Sondhi The Hongkong Shanghai Banking Corporation Ltd ICICI Bank Ltd Axis Bank Ltd Standard Chartered Bank IDBI Bank Ltd Kotak Mahindra Bank Ltd DBS Bank India Ltd Bank of Baroda HDFC Bank Ltd Citibank N.A. Qatar National Bank (Q.P.S.C.) Yes Bank Ltd Rajesh Parte Deloitte Haskins & Sells LLP, Chartered Accountants Grant Thornton Bharat LLP Kasturi Buildings, Mohan T Advani Chowk, Jamshedji Tata Road, Mumbai 400 020. Tel: +91 22 6665 4000 www.bluestarindia.com CIN: L28920MH1949PLC006870 MUFG Intime India Pvt Ltd (Formerly known as Link Intime India Pvt Ltd) C-101, 1st Floor C Tower, 247 Park, L.B.S. Marg, Vikhroli (West) Mumbai 400 083. Tel: +91 8108116767 Toll-free number: 1800 1020 878 Website: www.in.mpms.mufg.com
Introduction Corporate Information CORPORATE MANAGEMENT Vir S Advani Chairman & Managing Director B Thiagarajan Managing Director P V Rao Executive Director - Projects, Solutions & International Arun Rajan Group Chief Human Resources Officer (with effect from February 17, 2025) Nikhil Sohoni Group Chief Financial Officer Mohit Sud Group President, Unitary Cooling Products (with effect from March 31, 2025) V S Ashok Executive Vice President, Customer Experience & ESG C Haridas Executive Vice President, Sales & Marketing and Customer Service, Unitary Cooling Products Wilson Jebaraj Executive Vice President, Electro-Mechanical Projects & Customer Service M Srinivas Reddy Executive Vice President, Corporate Strategy & Business Development Nithianand S Executive Vice President, Procurement & Supply Chain Senthil Thangam Executive Vice President, Commercial Air Conditioning Products & Solutions and International Business Michael Angre Vice President, Customer Service, Central & Packaged Air Conditioning Deepak Baid Vice President, Research & Development, Unitary Cooling Products Sushil Deshpande Vice President, Manufacturing, Dadra & Wada Plants Ravi Hegde Vice President, Commercial & Procurement, Electro-Mechanical Projects & Air Conditioning Solutions Group Girish Hingorani Vice President, Marketing (Unitary Cooling Products) & Corporate Communications Suresh Iyer Chief Information Officer (up to September 30, 2024) Vikas Jain Vice President, Corporate Commercial Operations Suresh Kaushal Vice President, Quality (with effect from February 1, 2025) Sheetal M Kulkarni Vice President, R&D and Technology ( Commercial Air Conditioning & Refrigeration )
Blue Star Limited SUBSIDIARY COMPANIES Blue Star Engineering & Electronics Limited Prem Kalliath Chief Executive Officer Rajesh Sahu Chief Operating Officer - Industrial Solutions Atul Prabhakar Kulkarni Chief Business Officer - Medtech Solutions S Suresh Chief Business Officer – Data Security Solutions Yogesh Joshi Chief Financial Officer and Company Secretary Blue Star Climatech Limited Devidas Kasbekar Chief Executive Officer Sivakumar Ramani Vice President - Commercial Operations, Manufacturing & Chief Financial Officer Blue Star International FZCO Madhanagopal C Chief Executive Officer (with effect from October 1, 2024) Mohamed Abbas Miraj Chief Operating Officer (up to December 31, 2024) Blue Star North America Inc. Thomas F Overs Chief Executive Officer Blue Star Europe B.V. Jason Tinsley Vice President - Sales (U.K. and Europe) Rajesh Laddha Vice President, Manufacturing Engineering (with effect from November 27, 2024) Munish Malhotra Vice President, Procurement, Manufacturing Plants Udit Pahwa Chief Information Officer (with effect from May 21, 2024) R S Priya Vice President, Key Accounts Management & Marketing, ElectroMechanical Projects & Air Conditioning Solutions Group Jagadeeswara Rao E Vice President, Electro-Mechanical Projects (Factories & Data Centres) S Srikant Vice President - Sales & Marketing, Commercial Refrigeration Products & Solutions Vijayaraghavan V Vice President, Electro-Mechanical Projects (Infrastructure) (with effect from January 15, 2025)
FY25 was a year of meaningful progress across our key priorities. We strengthened our financial position, deepened customer trust, and aligned our people and capabilities to face the future with confidence. Letter from the Chairman & Managing Director 8 Blue Star Limited
Dear Stakeholders, I am pleased to share with you the Annual Report of Blue Star Limited for FY25. This also marks the completion of my first full year as Chairman and Managing Director, a role I take on with great responsibility and commitment. In the previous financial year, we celebrated Blue Star’s 80th anniversary, a landmark occasion that honoured our rich legacy while reaffirming the enduring values that define us — trust, excellence, and innovation. As we look ahead, we do so with clarity of purpose and renewed energy, entering a defining decade that will carry us towards our centennial. At last year’s Annual General Meeting, I spoke of Blue Star entering an exciting phase, backed by strength and ambition to scale new heights. In FY25, we have continued to build on that momentum by deepening our customer focus, advancing our digital and sustainability initiatives and enhancing agility across our operations. In this letter, I am pleased to share how we are shaping a future-ready Blue Star, one that is customer-centric, digitally enabled, operationally agile and environmentally responsible, all while building on the trust we have earned over the last 80 years. Financial Highlights for FY25 FY25 was not just another successful year; it was a year of meaningful transformation. We delivered our strongest financial and operational performance to date, surpassing the ₹10000 crores revenue milestone and achieving record profitability. These outcomes reaffirm the strength of the strategy we set in motion over the past few years — to focus on our core businesses, grow responsibly, and stay agile and innovative. The Company concluded FY25 on a strong note, with revenue growing by 23.6% to ₹11967.65 crores. Operating profit rose by a significant 31.8% to ₹875.92 crores. Profit Before Tax (before exceptional items) increased by 38.6% to ₹772.42 crores. Our order book stood at a record ₹6263.36 crores as of March 31, 2025, reflecting sustained demand across segments. In an all-round performance, every business vertical gained market share, while contributing to a 40-basis-point improvement in operating margin (7.3% in FY25 compared to 6.9% in FY24). Capital employed stood at ₹2427.28 crores as of March 31, 2025, up from ₹2156.70 crores a year earlier, primarily driven by capital investments. Our financial position remained robust, with a net cash balance of ₹640 crores, compared to ₹456 crores in FY24. Considering this strong performance, the Board of Directors has recommended a dividend of ₹9 per share. Business Highlights for FY25 The Electro-Mechanical Projects business delivered a strong performance, supported by robust demand from sectors such as manufacturing and data centres. Improved project margins and a robust carried-forward order book contributed significantly to overall profitability. The Commercial Air Conditioning business sustained its market leadership in ducted systems and grew market share in VRF and chillers. Growth was led by resilient demand from the healthcare, hospitality, and education segments. Looking ahead, the outlook remains positive, bolstered by increased Government capital expenditure. While geopolitical uncertainties and commodity cost pressures may persist, we are confident in our ability to seize emerging opportunities and deliver continued growth. The international business experienced slower-than-expected traction, impacted by uncertain global trade dynamics. However, we started commercial production for OEMs in the US and European markets and we remain optimistic that momentum will pick up as stability returns. The Room Air Conditioner business continued its strong trajectory, with exceptional performance in Q4FY25. Channel partners increased inventory in anticipation of a severe summer and potential supply chain disruptions. To meet the rising demand, the Company launched an enhanced range of room ACs, including a new premium flagship series, catering to diverse consumer segments and price points. The Commercial Refrigeration business rebounded from early regulatory challenges to deliver modest growth, fuelled by enhanced demand from high-growth sectors like ice cream, QSRs, HoReCa, quick commerce, food retail, and healthcare. With per capita income rising and consumption behaviour favouring preserved food, the outlook for this business is very positive. The Professional Electronics and Industrial Systems business had a challenging year due to regulatory restrictions in our Med Tech vertical and lower demand in the Data Security vertical. With demand and our competitive position 9 Introduction Letter from the Chairman & Managing Director
improving in the Industrial Systems vertical, this business is poised for a better year ahead. The Way Forward The Indian HVAC&R industry is poised for a decade of exponential growth — driven by low room AC penetration and a rising middle class with increasing disposable incomes, particularly in Tiers 3, 4 and 5 markets. As we look ahead, our ambition is clear — to grow faster than the market, create long-term value, and get Blue Star ready for the next stage of growth. Our strategy focuses on connected priorities that strengthen our ability to compete, stay strong, and remain relevant over time. We are scaling with intent, expanding our product portfolio and solution offerings, and have deployed QIP funds judiciously across R&D, manufacturing capacity creation, and digitalisation. These investments are not just growth enablers, but foundational to our ability to deliver products of the highest quality and to respond swiftly and sustainably to evolving market needs. Supporting this growth is a benchmarked quality management, risk management, and business continuity system that helps us move forward with confidence, even during uncertain times. To maintain market competitiveness, we are leveraging our balanced portfolio across B2B, B2C, and public sector customer segments, which enables us to respond to seasonality and shifting demand with greater agility. Our product development is rooted in deep consumer insights and a forward-looking view of regulatory trends, helping us stay ahead of evolving norms, whether it is energy labelling, refrigerant compliance, or changing customer expectations. Supporting this competitiveness is a supply chain strategy designed for adaptability and continuity. Strategic sourcing, localisation, and the execution of our Supply Chain Excellence Programme are creating long-term operational advantages and cost efficiencies. With a manufacturing and vendor base spread across India, we have built resilience into our operations, one that is not season-dependent but futureready. We now factor climate change into our planning and operations, enabling us to manage risks and adapt thoughtfully to a changing environment. We are also focusing more on international markets, aiming to grow our presence and increase overseas revenues over the next five years. While global conditions remain uncertain, we are working closely with India’s changing trade policies to find new opportunities and strengthen our position in the global HVAC&R industry. As we plan for the future, digitalisation continues to play an important role in our progress. We are using analytics, AI, and automation to support growth, improve profits, and better serve our customers. These technologies help us make smarter decisions, work more flexibly, and drive productivity. We remain focused on improving the overall customer experience. By strengthening our Customer Experience (CX) function, we aim to provide a consistent and positive experience at every stage. Our goal is to make Blue Star known for world-class customer service. This effort involves everyone including our business teams, partners, and staff — working together to put customers first. To support this, we are strengthening our teams’ capabilities and investing in digitalisation to meet and exceed customer expectations. Partnerships also remain integral to our growth strategy. Across our businesses, we are strengthening collaborations with channel partners, not just as distribution enablers, but as key stakeholders in delivering value to end customers. These partnerships are being nurtured through deeper engagement, joint capability-building, and aligned incentives to ensure a seamless and superior customer experience. At the core of everything we do is the belief that our people are key to our long-term success. We focus on developing leaders, preparing for the future, and creating a culture based on fairness, innovation, and safety. Through clear succession plans, attention to diversity and inclusion, and bringing in new talent, we stay flexible and ready to adapt. By welcoming people from different backgrounds and industries, we bring together new experiences and ideas. This is enabling us to reinvent ourselves as a high-performance, people-first organisation, that is anchored not only in capability, but in care, safety, and long-term sustainability. We manage our capital with a long-term perspective, balancing growth plans with building skills and aiming for steady returns. Each investment supports our main strengths, encourages innovation, and aims to create lasting value. This careful approach helps us build a strong and resilient company for the future. Sustainability is a core part of our work and growth. Our commitment to achieving Net Zero emissions (Scope 1 and 2) by 2035 is matched by our continued leadership in energy-efficient solutions, responsible refrigerant use, and robust e-waste management practices. By following ESG principles across the Company, we aim for a responsible transformation that meets current and future needs. 10 Blue Star Limited
In Conclusion FY25 was a year of meaningful progress across our key priorities. We strengthened our financial position, deepened customer trust, and aligned our people and capabilities to face the future with confidence. Every action we took was focused on creating long-term value. Reflecting on the year gone by, what stands out is not just what we achieved, but how focused and consistent we were in our efforts. Even as the external environment continues to shift, bringing new complexities and opportunities, we remain anchored in our purpose. Our commitment to professionalism and responsibility enables us to handle change, and our focus on innovation keeps us moving ahead. This progress would not have been possible without the dedication and support of all our stakeholders. I would like to extend my heartfelt gratitude to our leadership team, employees, business associates, customers, and shareholders for their continued commitment. Your contributions have played a pivotal role in helping us deliver on our goals. I am confident that the years ahead will shape Blue Star in ways that reflect not only our performance but also our ability to lead with focus and determination. We will continue to challenge limits, investing in the skills we need for the future, and building lasting value, all rooted in the principles that have supported us for more than 80 years. Yours sincerely, Vir S Advani Chairman & Managing Director 11 Introduction Letter from the Chairman & Managing Director
Board of Directors Blue Star Limited 12
SUNEEL M ADVANI Chairman Emeritus Suneel M Advani is a double graduate in Electrical Engineering and Economics from MIT, USA. He also holds an LLB degree from Mumbai University. Mr Advani spent his entire professional career at Blue Star, beginning as a management trainee in 1969. Over the years, he steadily rose through the ranks, becoming President and Vice Chairman in 1984. In 2014, he retired from his executive role and was designated Vice Chairman of the Board. In December 2016, he was appointed Chairman of the Board, a position he held until his retirement from the Board on March 31, 2019, after 50 years with the Company, including 36 years on its Board. In recognition of his exemplary leadership, Mr Advani was honoured with the title of Chairman Emeritus. He continues to be associated with the Company as an advisor to both the Board and Executive Management. During his tenure, Mr Advani played a key role in establishing Blue Star’s presence in computer software development and exports. When this division was spun off in 2000 to form Blue Star Infotech Limited, he became Chairman and later Managing Director. He also led many successful joint ventures with global companies such as HP, Motorola, and Stork-Comprimo, in addition to forming strategic partnerships within the Indian air conditioning industry. Mr Advani was instrumental in several corporate acquisitions for both Blue Star and Blue Star Infotech Limited. Throughout his career, Mr Advani contributed significantly to the industry and trade bodies, serving on the managing councils of several organisations, including the Confederation of Indian Industry (CII). He is also the founder and a Past President of the Refrigeration and Air Conditioning Manufacturers Association (RAMA). Ashok M Advani holds an MBA from the Harvard Graduate School of Business Administration, an Electrical Engineering degree from MIT, USA, and a BSc (Honours) from Mumbai University. With a distinguished career spanning over 47 years at Blue Star, Mr Advani served as its Chairman for 33 years. Under his leadership, the Company’s revenue grew more than 400-fold and became a recognised leader in the Air Conditioning and Commercial Refrigeration industry in India. Mr Advani retired from the Board in November 2016, but in recognition of his exceptional leadership and legacy, he was appointed Chairman Emeritus. He continues to be an invitee to the Board Meetings and remains deeply engaged with the Company as an advisor to both the Board and Executive Management. ASHOK M ADVANI Chairman Emeritus Introduction Board of Directors 13
VIR S ADVANI Chairman & Managing Director B THIAGARAJAN Managing Director Vir S Advani holds a Bachelor’s degrees in Systems Engineering and Economics from the University of Pennsylvania. He has also completed an Executive Management Programme at Harvard Business School. After a two-year stint in private equity in New York, Mr Advani joined Blue Star Infotech Limited in 2000 and later founded Blue Star Design and Engineering Limited in 2003, where he served as the Chief Executive Officer. In 2007, he transitioned to Blue Star, assuming the role of Vice President of Corporate Affairs. He was promoted to Executive Director in 2010. In April 2016, Mr Advani was appointed as Managing Director of Blue Star, and in April 2019, he was elevated to Vice Chairman and re-designated as Vice Chairman & Managing Director. In April 2024, he assumed the role of Chairman & Managing Director of the Company. In his expanded role, Mr Advani serves as the key interface between the Board and Executive Management. He directly oversees various businesses and functions, including Professional Electronics & Industrial Systems, International Operations, Corporate Finance, Corporate Human Resources, Information Technology, and Corporate Planning. Mr Advani is an active member of the Confederation of Indian Industry (CII), and is currently the Deputy Chairman of the CII Western Region Council. B Thiagarajan holds a Bachelor’s degree in Electrical and Electronics Engineering from Madurai University. He has also completed the Senior Executive Programme from London Business School. He has more than four decades of experience, having worked for reputable companies such as Larsen & Toubro Limited, BPL Systems Limited and Voltas Limited, prior to joining Blue Star in 1998. Mr Thiagarajan has handled various assignments in Service Business, Corporate Communications & Marketing and Corporate Affairs & Planning before being promoted to President of the AC&R Products Group in 2009. He was elevated to the Board in 2013 and was appointed as Joint Managing Director in 2016 before taking charge as Managing Director with effect from April 2019. He currently oversees the Air Conditioning and Refrigeration business operations in India, including Sales & Marketing, Manufacturing, R&D, Supply Chain, and Customer Service. His remit also includes Corporate Communications and Public Relations functions. Mr Thiagarajan plays an active role in various industry forums and is currently a member of the CII National Council, and chairs the CII National Committee on CSR and the CII Trade Fairs Council. He is also the National Chairman of the Indian Green Building Council and Chairman of the CII Green Cooling Council. In the past, he has been President of Refrigeration and Air Conditioning Manufacturers Association (RAMA), and Chairman of both, CII Western Region and CII Maharashtra State. Blue Star Limited 14 Board of Directors
P V RAO Executive Director - Projects, Solutions & International P Venkata Rao holds a Bachelor’s degree in Mechanical Engineering, an MBA in Marketing, and a Post Graduate Diploma in Industrial Relations and Personnel Management. He has also completed the Senior Executive Programme at London Business School. Mr Rao joined Blue Star in 1985 and has had a distinguished career spanning nearly four decades with the Company. During his tenure, he has held various roles and played a key role in turning around the Electro-Mechanical Projects business, transforming it into a profitable segment with a distinct value proposition centered on superior project delivery. As Executive Director – Projects, Solutions & International, Mr Rao oversees the Electro-Mechanical Projects business as well as Central Air Conditioning products and services business in India. He is also leading Blue Star’s expansion efforts in the air conditioning and refrigeration markets across the Middle East and Africa. Mr Rao represents Blue Star Limited as an elected member of the Confederation of Indian Industry (CII), Maharashtra State Council. He is also a Life Member of the Indian Society of Heating, Refrigerating and Air Conditioning Engineers (ISHRAE). Sam Balsara holds a Bachelor’s degree in Commerce and a Post Graduate Diploma from Jamnalal Bajaj Institute of Management Studies. He is the Chairman of Madison World, one of India’s largest media and communication agencies, and brings over 50 years of extensive experience in marketing, advertising, and media. Mr Balsara began his career in 1972 at Sarabhai’s, followed by roles at Cadbury India Limited, Contract Advertising Company (WPP), and Mudra Communications before founding Madison in 1988. Under his leadership, Madison Media is ranked by RECMA as the ‘4th Largest Independent Media Agency’ worldwide by billings. He has received numerous accolades, including being named ‘The Most Influential Person in Media’ by Economic Times - Brand Equity for 10 consecutive years since 2005, the IAA Leadership Award for ‘Media Agency Professional of the Year’ in 2013, and the‘Lifetime Achievement Award’in 2009 from the Advertising Agencies Association of India. Mr Balsara served as a jury member at the International Festival of Advertising in Cannes in 2005 and 2014. He has held prominent positions such as President of the Advertising Agencies Association of India (AAAI), where he remains an Executive Committee member, and Chairman of the Advertising Standards Council of India from 2000 to 2001, where he currently serves as an Advisor. Mr Balsara joined the Blue Star Board in June 2017. SAM BALSARA Independent Director Introduction Board of Directors 15
RAJIV R LULLA Non-Executive Director Rajiv Lulla holds a Bachelor’s degree in Mechanical Engineering with Electronics from King’s College, London, and a Master’s degree from Imperial College, London. He is a Founding Partner at Deep Blue Advisors, a technology-enabled financial services firm. Mr Lulla brings over 25 years of experience as an investment banker, specialising in merger advisory and corporate finance. He has successfully completed transactions with a combined value exceeding $220 billion across diverse sectors including industrial, infrastructure, transport, and telecom. He has held senior global leadership positions at Merrill Lynch, Credit Agricole Group, and Deutsche Bank, with postings in New York, London, Paris, and Hong Kong. Mr Lulla joined the Board of Blue Star in December 2016. ANIL HARISH Independent Director Anil Harish is a Partner at the law firm D M Harish & Co., with a practice encompassing diverse areas such as Property, Exchange Control, Foreign Investments, Trusts, Wills, and both Indian and International Taxation. He has served on the Managing Committee of the Indian Merchants Chamber, Chamber of Tax Consultants, and ITAT Bar Association. Additionally, Mr Harish has held leadership positions in several legal institutions, including serving as Vice President of the Society of Indian Law Firms. Recognised as a leading tax lawyer by the prestigious legal directory Chambers & Partners, Mr Harish has authored numerous articles published in leading newspapers and professional journals. He joined the Board of Blue Star in November 2017 and is also a Director of reputed companies including Hinduja Global Solutions Limited and Oberoi Realty Limited. Beyond his corporate roles, Mr Harish is actively involved with various educational and charitable trusts and serves as a Trustee of the Hyderabad (Sind) National Collegiate Board. Blue Star Limited 16
SUNAINA MURTHY Non-Executive Director Sunaina Murthy holds a Bachelor’s degree in Molecular Genetics from the University of Rochester and a Master’s degree in Biotechnology from Northwestern University. She has also earned an IICA Certificate in Corporate Governance and a Competent Boards Certificate in Climate and Biodiversity. Ms Murthy began her career as a cancer researcher at the University of Pennsylvania before moving into venture capital with a focus on life sciences. She co-managed a $3 billion healthcare fund at AIM Capital Management, USA, making investments across biotechnology, medical devices, pharmaceuticals, hospitals, and healthcare services. Since returning to India in 2006, she has consulted for venture capital firms and companies in the life sciences and healthcare sectors, both in the US and India. She has been a member of the Board of Blue Star Engineering & Electronics since 2023 and has served on the Board of Trustees of the Blue Star Foundation for over 13 years. Ms Murthy joined the Blue Star Board in April 2019. G MURLIDHAR Independent Director G Murlidhar is a Chartered Accountant, Cost & Management Accountant, and Company Secretary, and has completed the Advanced Management Programme (AMP) at Harvard Business School, USA. He is a seasoned finance professional with extensive experience across industries such as insurance, financial services, engineering, pharmaceuticals, and manufacturing. He currently serves as a NonExecutive Director of Kotak Mahindra Life Insurance Company Limited. Mr Murlidhar was a founding member of Kotak Life Insurance in 2001 and has held several key leadership roles, including CFO and COO. He served as Managing Director and CEO of the Kotak Life Insurance from 2011 until his retirement in 2021. During his tenure, he played a pivotal role in establishing a robust financial and operational foundation and developing a diversified and balanced distribution network. He has received numerous prestigious awards, including the ‘CA Business Leader – Insurance’ award from the Institute of Chartered Accountants of India and the ‘Insurance CEO of the Year’ award from FICCI. As a prominent leader in the insurance sector, he served as Co-Chairman of the Insurance Committee of FICCI, a member of the Executive Committee of the Life Insurance Council, and a member of the Insurance Advisory Committee (IAC) of Insurance Regulatory and Development Authority of India (IRDAI). Mr Murlidhar joined the Board of Blue Star in January 2024. Introduction Board of Directors 17
ANITA RAMACHANDRAN Independent Director Anita Ramachandran holds a Master’s degree in Business Administration (MBA) from Jamnalal Bajaj Institute of Management Studies, Mumbai. She is a renowned HR expert in India with over 40 years of experience as a management consultant and has received several academic honours. Ms Ramachandran began her career in 1976 as the first woman consultant in the Management Consultancy division of AF Ferguson & Co, Mumbai. She worked across various domains including industrial market research, strategy, and human resources, eventually becoming a director at the firm. After 19 successful years, she founded Cerebrus Consultants, focusing on HR advisory and organisational transformation. Under her leadership, Cerebrus has partnered with over 800 companies across South Asia on diverse HR projects. She is widely recognised as an authority in rewards management and serves as a strategic advisor to family groups and mentor to numerous private equity firms and start-ups. Ms Ramachandran has served as an Independent Director on several boards and currently serves on the boards of Grasim, Ultratech, Happiest Minds, and FSN E-commerce, among others. In addition to her corporate roles, she supports various social sector organisations and is deeply committed to women’s empowerment. She has previously been Chairperson of TiE Women, served on the Executive Committee of TiE Mumbai, and was a member of the Advertising Standards Council of India. Ms Ramachandran joined the Blue Star Board in June 2022. ARVIND K SINGHAL Independent Director Arvind K Singhal holds an Engineering degree in Electronics and Communication from IIT Roorkee, which also recognised him as a ‘Distinguished Alumnus,’ and an MBA in Finance and Marketing from UCLA, USA. He is the Founder and Chairman of Technopak Advisors, one of India’s leading management consulting firms focusing on three key sectors that include Consumer Products & Retail, Textiles & Apparel, and Food & Food Services. He is also currently an Independent Director of Metro Brands Limited & Greaves Electric Mobility Private Limited and on the Advisory Board of Delhi-based Pahle India Foundation (PIF). He joined the Blue Star Board in February 2019. Blue Star Limited 18
VIPIN SONDHI Independent Director Vipin Sondhi holds a Bachelor’s degree in Technology in Mechanical Engineering from IIT, Delhi and a Post Graduate Diploma in Management from IIM, Ahmedabad. He has about four decades of experience in the Manufacturing and Engineering sectors. He has been the Managing Director and Chief Executive Officer of Ashok Leyland, JCB India and Tecumseh India. He has also worked with other reputed organisations, including Tata Steel, Shriram Honda Power Equipment and Escorts Limited. He is currently Chairperson, National Board for Quality Promotion, Quality Council of India; Member, Technology Advisory Group to Empowered Technology Group (Appointed by Principal Scientific, Advisor to the Government of India); Chairperson of the Confederation of Indian Industry’s Green Mobility Council and Member, Governing Board of I-Hub for Autonomous Systems Innovation Foundation, Indian Institute of Science, Benguluru. In addition, he has been the past Vice President of Society of India Automobile Manufacturers (SIAM). He is on the Board of several ‘not-for-profit’ organisations such as Bharatiya Yuva Shakti Trust, Ananta Centre and Sasakawa India Leprosy Foundation. He is also an Independent Director and joined the Board of Blue Star in January 2024. DINESH N VASWANI Non-Executive Director Dinesh N Vaswani holds an MBA from the Wharton School of Business and a BBA cum laude from the University of Texas at Austin. He is the Founder and Managing Director of Acuitas Capital Advisors Private Limited, a multi-family investment office that advises families on their investments. He has over three decades of experience in both investing and operating companies in India and the US. Mr Vaswani was a Managing Director at Temasek Holdings Advisors India Private Limited, established Bessemer Venture Partners’ operations in India, and was the CEO of Blue Star Infotech Limited, USA. He has served on several Boards of public and private companies, including Firstsource, Mindtree, Venture Infotech, and Borosil. He joined the Board of Blue Star in December 2016. Introduction Board of Directors 19
Rooted in decades of excellence and trust, Blue Star has earned the confidence of millions across generations, with nearly one in every three buildings in India featuring a Blue Star installation — underscoring its enduring presence and leadership in the HVAC&R industry. Company Overview State-of-the-art manufacturing facility in Sri City, Andhra Pradesh Blue Star Limited 20
Cooling Expertise At the forefront of innovation and excellence, Blue Star is a leader in cooling solutions, unmatched in its scale, quality, and impact. With a rich heritage of deep domain knowledge, technical prowess, and a highly skilled workforce, the Company has cemented its position as a leader in the industry. Offering an extensive range of cutting-edge cooling and purification solutions, Blue Star has also expanded its horizons into the residential air conditioner market since 2011, achieving an impressive market share. Project Execution and Mechanical, Electrical, and Plumbing (MEP) Services Blue Star is a leading provider of MEP services, with its Electro-Mechanical Projects business delivering complex infrastructure and commercial developments across India. The Company’s strong track record in delivering complex HVAC&R projects has enabled it to build advanced project management capabilities, ensuring precision, efficiency, and strict adherence to timelines. Leveraging this expertise, Blue Star has earned a reputation for dependable execution, often completing projects ahead of schedule, and reinforcing its position as a trusted partner across construction, infrastructure, and building systems. A legacy of Innovation, Trust, and Integrated Capabilities Blue Star has been a part of India’s business and consumer landscape for over eight decades. Founded with a commitment to engineering excellence, the Company has been a trusted name in the Air Conditioning, Commercial Refrigeration, Mechanical, Electrical and Plumbing (MEP) and firefighting solutions. At the core of Blue Star’s business is an integrated model that brings together manufacturing capabilities, Engineering, Procurement and Construction (EPC) services, and after-sales service and support — enabling it to deliver comprehensive solutions across residential, commercial, and large infrastructure segments. Blue Star’s philosophy, deeply rooted in the principles of ‘Trust’ and ‘Excellence’, continues to guide its journey of sustainable growth and innovation. Reputed for its customercentric approach, the Company is committed to delivering technologically advanced, value-driven solutions that cater to the evolving and diverse needs of customers. Its inherent agility and resilience enable it to adapt swiftly to market dynamics while maintaining a strong focus on quality and reliability. Integrated Business Model with End-to-End Capabilities Blue Star operates through a comprehensive and integrated business model, encompassing manufacturing, Engineering, Procurement and Construction (EPC) services, along with robust after-sales support. This end-to-end approach enables the Company to deliver holistic solutions across the building, industrial, and infrastructure sectors. The integrated structure not only enhances operational efficiency but also ensures agility and responsiveness in meeting customer requirements across diverse project scales and timelines. After-sales Service Excellence Blue Star operates one of the largest service networks in India’s HVAC&R industry. These‘Gold Standard’services are delivered through a combination of the Company’s own infrastructure and capabilities and an extensive nationwide network of service partners. Beyond routine servicing, the Company offers value-added solutions including revamps, retrofits, duct cleaning, and operational support. By leveraging advanced technologies such as remote monitoring, mobile apps, and interactive web portals, Blue Star ensures prompt, efficient, and seamless service across all customer locations. Market Reach and Customer Proximity With a well-established channel partner network covering all major regions in India, Blue Star ensures proximity and accessibility for its customers, irrespective of their location. This wide reach allows the Company to deliver not only products, but also provide timely support and service wherever needed. Manufacturing Excellence and Innovation Blue Star continues to make strategic investments in enhancing its manufacturing capabilities, leveraging advanced technology, automation, and robotics across its facilities. The Company and its subsidiaries operate seven world-class manufacturing plants across India: in Ahmedabad, Dadra, two locations in Wada, two in Himachal Pradesh, and the latest facility in Sri City established by its wholly-owned subsidiary, Blue Star Climatech Limited. The addition of the new plants in Over 8 decades of engineering excellence Integrated Report 21 Company Overview
Sri City and Wada significantly expanded Blue Star’s production capacity, positioning the Company to meet the demands of its next phase of growth. Global Footprint Blue Star exports HVAC&R products and solutions to over 20 countries across the Middle East, Africa, SAARC, and ASEAN regions, where they perform reliably even in some of the world’s most demanding climatic conditions. The Company has also expanded its global presence through strategic joint ventures in Qatar and Malaysia, undertaking MEP projects across residential, commercial, and infrastructure sectors. Further strengthening its international footprint, Blue Star has established wholly-owned subsidiaries in the USA, Europe, and Japan — reinforcing its long-term commitment to global growth and market diversification. Other Businesses Blue Star’s diversified portfolio includes the marketing, solution design, and maintenance of imported professional electronic equipment and industrial systems, managed through its wholly-owned subsidiary, Blue Star Engineering & Electronics Limited (Blue Star E&E). The subsidiary also offers refurbishment solutions for medical diagnostic equipment. Today, Blue Star E&E is a leading provider of advanced technology products and turnkey engineering solutions, catering to a wide range of industries across India. Blue Star Limited 22
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Business Segments Blue Star operates through multiple strategic business segments, offering a comprehensive portfolio of products, systems, and services. This enables the Company to address varied customer needs across sectors and markets, while driving innovation and operational efficiency. Outdoor Unit assembly conveyer belt at Sri City Plant Blue Star Limited 24
Electro-Mechanical Projects and Commercial Air Conditioning Systems This segment encompasses the design, installation, and maintenance of central air conditioning systems, including packaged, ducted systems, Variable Refrigerant Flow (VRF) units, scroll chillers, screw chillers, centrifugal chillers and data centre chillers. It also offers turnkey contracting services across Mechanical, Electrical and Plumbing (MEP), and firefighting domains. The division provides valueadded services such as retrofitting, system upgrades, and ongoing operational support to ensure optimal efficiency and performance of electro-mechanical systems. Unitary Products This segment focuses on the development, manufacturing, and distribution of a broad portfolio of modern, energyefficient room air conditioners designed for both residential and commercial use. It also includes an extensive portfolio of commercial refrigeration solutions and cold chain equipment. The segment also includes air purifiers and air coolers. Professional Electronics and Industrial Systems For over seventy years, Blue Star has been the exclusive distributor in India for a wide range of internationally acclaimed manufacturers in MedTech, Data Security and Industrial Solutions. Blue Star Engineering & Electronics Limited, a wholly-owned subsidiary of the Company, manages this business segment. The subsidiary also operates a Medical Diagnostic Equipment Warehouse in Bhiwandi, Maharashtra, which manages a wide range of diagnostic imaging systems and spares, ensuring they are well-maintained and readily available for reliable use. Additionally, Blue Star has established two customer experience centres _ one in Thane, focused on non-destructive testing solutions, and another in Chennai, dedicated to material testing and metrology solutions. Immersion Ultrasonic Testing System by Blue Star Engineering & Electronics Limited Integrated Report 25 Business Segments
Blue Star is driving growth and innovation in India’s evolving HVAC&R industry by expanding its presence and investing in advanced technologies. Through strategic initiatives and a customer-centric approach, the Company is focused on embracing emerging opportunities and delivering sustainable value. Industry Structures and Segments Inverter AC assembly in progress at Sri City Plant Blue Star Limited 26
Air Conditioning The demand for room air conditioners continues to grow steadily, driven by increasing summer temperatures across India and the rising disposable incomes of an expanding middle class. This surge is further fuelled by enhancing adoption in Tier 3, 4, and 5 markets, replacement purchases, and customers purchasing ACs for additional rooms. Industry forecasts indicate that India’s AC market is poised to double by FY30. In FY25, the sector achieved robust growth of around 30%, with sales reaching 14 million units, propelled by an intense summer. The overall market value expanded to `35000 crores in FY25, with central air conditioning — including central plants, packaged and ducted systems, and Variable Refrigerant Flow (VRF) systems — accounting for `5000 crores, while room air conditioners constituted `30000 crores. Blue Star outperformed industry growth, strengthening its market share amidst fierce competition. As India prepares to welcome approximately 450 million middle-class consumers by 2030, the room AC market stands at an inflection point, set for exponential growth. Key drivers such as rapid housing sector expansion, accelerated adoption of renewable energy, and vibrant rural economic growth are shaping the industry’s trajectory. The Company continues to invest in R&D, manufacturing, and supply chain capabilities to leverage these industry trends. In the year under review, Central Air Conditioning business executed pivotal strategic initiatives, including refreshed product positioning and channel expansion into untapped territories. The Company successfully launched a range of cutting-edge centrifugal chillers, data centre chillers, brine chillers, and residential VRF systems. This helped in garnering substantial market share from sectors such as education, hospitality, retail, and Government. Blue Star retained its leadership in the ducted air conditioning segment, holding the top rank, and securing a strong topthree position in the VRF and chiller categories. Its market share stood at approximately 20% in VRF systems and screw chillers, while it dominated the ducted systems and scroll chillers categories, commanding shares of 50% and 45%, respectively. Commercial Refrigeration The Company’s extensive range of commercial refrigeration products includes deep freezers, bottle coolers, storage water coolers, modular cold rooms, visi coolers, water dispensers, and mini bars. For commercial kitchens, the portfolio features back bar chillers, blast chillers and freezers, reach-in units, saladettes, and under-counters. In the medical sphere, Blue Star provides specialised solutions such as blood bank refrigerators, ice-lined refrigerators, medical freezers, pharmaceutical refrigerators, ultra-low temperature freezers, vaccine transporters, and mortuary chambers. Supermarket offerings include island coolers/freezers, multideck chillers, and upright freezers. The accelerating trend of out-of-home consumption, particularly of perishable foods, remains a significant growth driver for this business. Blue Star is focused on maintaining market leadership by delivering an innovative range of energy-efficient and eco-friendly products. The Company has invested substantially in digitalisation and Internet of Things (IoT) technologies, enhancing product performance and operational efficiency. 50% 45% Market Share in Ducted Systems Market Share in Scroll Chillers Out-of-home consumption driving growth Integrated Report 27 Industry Structures and Segments
Air Cooler Air Purifier Inverter Split AC Window AC Wide Range of Products Fixed Speed Split AC Blue Star Limited 28
Top Discharge Side Discharge VRF Lite Four-way Cassette AC Concealed Split AC One-way Cassette AC Hi-wall AC Ductable AC VRF System Indoor units Outdoor units Integrated Report 29 Wide Range of Products
Ducted ACs and Packaged Systems Air Cooled Ducted Split Indoor Unit Air Cooled Ducted Split Outdoor Unit Inverter Packaged Outdoor Unit Floor Mounted Packaged Indoor Unit Water Cooled Mini Series Indoor Unit Water Cooled Mini Series Outdoor Unit Blue Star Limited 30
Centrifugal Chiller Brine Chiller Water Cooled Inverter Scroll Chiller Data Centre Chiller Air Cooled Inverter Scroll Chiller Integrated Report 31 Wide Range of Products
Deep Freezer Cold Room Four Door Reach-in Chiller Blue Star Limited 32
Storage Water Cooler Visi Cooler Bottled Water Dispenser Mini Bar Pastry Cabinet Integrated Report 33 Wide Range of Products
Prestigious Installations Magnetic bearing oil-free chillers and MEP works at Meenakshi Super Specialty Hospital, Madurai Environmental Control Systems (ECS) and Tunnel Ventilation (TVS) works at Mumbai Metro Line-3 Blue Star Limited 34
Air Insulated Substation (AIS) work in progress at Fatehgarh, near Jaisalmer, Rajasthan Railway Electrification: 2x25 kV Traction substation work at Gaya, Bihar Integrated Report 35 Prestigious Installations
Compressed air station at Kutch Copper Limited, Gujarat VRF and ducted systems at Baroda Cricket Association Stadium Blue Star Limited 36
Firefighting work at Phoenix Centaurus, Hyderabad MEP works at Sky City Mall, Borivali, Mumbai Integrated Report 37 Prestigious Installations
With a clear strategic focus on global growth, Blue Star has expanded its international presence through whollyowned subsidiaries. These developments reflect the Company’s long-term vision to become a leading provider of sustainable and technologically advanced HVAC&R solutions across high-potential global markets. The establishment of wholly-owned subsidiaries — Blue Star North America Inc., Blue Star Europe B.V., and Blue Star International FZCO, UAE — has positioned the Company as a significant player in the HVAC markets across North America, Europe, the Middle East, and Africa. This aligns with Blue Star’s vision to capitalise on high-growth regions where demand for energy-efficient and technologically advanced solutions is rapidly increasing. By consolidating its operations in these geographies, Blue Star aims to strengthen capabilities and accelerate its global reach. Expanding Global Presence The product portfolio in these regions includes: These offerings are designed to integrate seamlessly with customer systems, delivering superior energy efficiency and sustainability — critical factors shaping the HVAC market today. Air-to-Water Heat Pumps (monobloc and split configurations) Air-to-Air Heat Pumps such as Mini-Splits and Ducted Heat Pumps Variable Refrigerant Flow (VRF) Systems including commercial VRF and application-specific specialised products Modular Chillers/ Commercial Heat Pumps Middle East, Africa, SAARC, and ASEAN: Geographical Expansion by building distribution network Blue Star continues to grow its footprint across the Middle East, Africa, SAARC, and ASEAN regions via Blue Star International FZCO, headquartered in the UAE. This subsidiary oversees operations, joint ventures, and exports in over 20+ countries focusing on HVAC systems and solutions across residential, commercial, and industrial sectors. Despite geopolitical challenges, Blue Star has sustained steady market growth in FY25, with enhanced product offerings such as VRF systems and AHRI-certified chillers and enhanced market coverage through channel expansion strategies receiving positive market response, particularly in the UAE and GCC countries. America and Europe: Focused Expansion for Sustainable Growth In America and Europe, Blue Star is steadily expanding its footprint through a customer-centric approach that emphasises custom-design manufacturing. Moving beyond traditional OEM or ODM models offering generic catalogue products, Blue Star collaborates closely with key customers to develop bespoke HVAC&R solutions tailored to specific market needs. This approach helps build differentiation through design, bridge product gaps, shorten time-to-market, and foster innovation across key product lines including heat pumps utilising inverter technologies, and low-GWP refrigerants. Blue Star Limited 38
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