ANNUAL REPORT BLUE STAR LIMITED 2025-26
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. Forwardlooking 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.
CONTENTS 4-19 08 Letter from the Chairman & Managing Director 12 Board of Directors 20-110 INTEGRATED REPORT 22 Company Overview 26 Business Segments 28 Industry Structures and Segments 30 Wide Range of Products 36 Prestigious Installations 42 Expanding Global Presence 46 Enhanced Value Creation 48 Financial Capital 50 Manufactured Capital 60 Intellectual Capital 66 Human Capital 68 Relationship Capital 74 Social Capital 80 Natural Capital 84 Information Technology 88 Brand Equity 92 Awards and Recognitions 94 Risks and Mitigation Strategies 100 Strategic Planning and Development 104 Ample Opportunities 106 ESG Practices 110 Geographical Outreach CORPORATE OVERVIEW
111-227 STATUTORY REPORTS FINANCIAL STATEMENTS 228 Independent Auditor’s Report on Consolidated Financial Statements 236 Consolidated Balance Sheet 237 Consolidated Statement of Profit and Loss 238 Consolidated Statement of Changes in Equity 239 Consolidated Statement of Cash Flows 241 Notes to Consolidated Financial Statements 323 Independent Auditor’s Report on Standalone Financial Statements 334 Standalone Balance Sheet 335 Standalone Statement of Profit and Loss 336 Standalone Statement of Changes in Equity 337 Standalone Statement of Cash Flows 339 Notes to Standalone Financial Statements 228-414 111 Board’s Report 135 Corporate Governance Report 169 Management Discussion and Analysis 175 The Dynamics of Blue Star’s Growth 176 Business Responsibility and Sustainability Report www.bluestarindia.com For more information, please scan the QR code or visit our website:
BOARD OF DIRECTORS Vir S Advani Chairman & Managing Director B Thiagarajan Managing Director Mohit Sud Executive Director – Unitary Cooling Products Group (with effect from April 1, 2026) Non-Executive Directors Rajiv R Lulla Sunaina Murthy Dinesh N Vaswani Independent Directors Anil Harish G Murlidhar Anita Ramachandran Arvind K Singhal (till May 30, 2026) Vipin Sondhi M S Unnikrishnan COMPANY SECRETARY & COMPLIANCE OFFICER Rajesh Parte REGISTERED OFFICE Kasturi Buildings, Mohan T Advani Chowk, Jamshedji Tata Road, Mumbai 400 020. Tel: +91 22 6665 4000 www.bluestarindia.com CIN: L28920MH1949PLC006870 BANKERS The Hongkong and 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 Yes Bank Ltd The South Indian Bank Ltd AUDITORS Deloitte Haskins & Sells LLP, Chartered Accountants INTERNAL AUDITORS Grant Thornton Bharat LLP REGISTRAR & TRANSFER AGENT MUFG 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 Blue Star Limited 4
CORPORATE MANAGEMENT Vir S Advani Chairman & Managing Director B Thiagarajan Managing Director Mohit Sud Executive Director – Unitary Cooling Products Group (with effect from April 1, 2026) Sanjeev Agrawal Group Chief Technology Officer (with effect from August 1, 2025) Manish Jha Group President – Manufacturing (with effect from November 5, 2025) Arun Rajan Group Chief Human Resources Officer Nikhil Sohoni Group Chief Financial Officer V S Ashok Executive Vice President, Customer Experience & ESG Wilson Jebaraj Executive Vice President, Electro-Mechanical Projects Nithianand S Executive Vice President, Procurement & Supply Chain Senthil Thangam Executive Vice President, Commercial Air Conditioning Products & Solutions, International Business and Customer Service Michael Angre Vice President, Customer Service, Central & Packaged Air Conditioning Sushil Deshpande Vice President, Manufacturing, Dadra & Wada Plants Girish Hingorani Vice President, Marketing (Unitary Cooling Products) & Corporate Communications Vikas Jain Vice President, Corporate Commercial Operations V Jayaprakash Vice President, Sales, Unitary Cooling Products Suresh Kaushal Vice President, Quality Sheetal M Kulkarni Vice President, R&D and Technology (Commercial Air Conditioning & Refrigeration) Rajesh Laddha Vice President, Manufacturing Engineering Munish Malhotra Vice President, Procurement, Manufacturing Plants Udit Pahwa Chief Information Officer Girish Parundekar Vice President, Manufacturing (with effect from June 3, 2025) Annual Report 2025-26 5 CORPORATE OVERVIEW
R S Priya Vice President, Key Accounts Management & Marketing, Electro-Mechanical Projects & Air Conditioning Solutions Group Jagadeeswara Rao E Vice President, Electro-Mechanical Projects (Factories & Data Centres) S Srikant Vice President, Sales & Service, Cold Storages Division Vijayaraghavan V Vice President, Electro-Mechanical Projects (Infrastructure) 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 Bikash Chandra Gupta Chief Financial Officer, (with effect from October 28, 2025) Blue Star Climatech Limited Manish Jha Chief Executive Officer, (with effect from January 19, 2026) Sivakumar Ramani Vice President, Commercial Operations, Manufacturing and Chief Financial Officer Blue Star International FZCO Madhanagopal C Chief Executive Officer 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) Blue Star Limited 6
Annual Report 2025-26 7 CORPORATE OVERVIEW
LETTER FROM THE CHAIRMAN & MANAGING DIRECTOR “As investments in manufacturing, industrial infrastructure, and data centres continue to accelerate, demand for specialised cooling solutions is expected to expand meaningfully, creating attractive opportunities across our projects and air conditioning solutions businesses.” VIR S ADVANI Chairman & Managing Director
Dear Stakeholders, I am pleased to present the Annual Report of Blue Star Limited for FY26. Over the past few years, Blue Star has been on a robust growth trajectory while steadily strengthening its foundation. Sustained investments in research and development have broadened our product portfolio and built differentiated capabilities across our businesses. We have also expanded manufacturing capacity and operational infrastructure to support our next phase of growth. We are beginning to leverage data analytics, artificial intelligence, automation, and connected technologies to drive efficiency and agility across the organisation. At the heart of these efforts is our continued investment in ensuring that our workforce is equipped to navigate a dynamic business environment. These initiatives have reinforced our leadership position across businesses and enhanced the Company’s ability to capitalise on emerging opportunities. FY26, however, was marked by a series of external challenges that impacted businesses across many sectors. The year began with a delayed and subdued summer season, which adversely affected demand across key cooling categories. This was followed by global trade tensions which affected market sentiment and disrupted business planning across industries. The implementation of GST-related changes resulted in a temporary slowdown in sales in Q2FY26. As the year progressed, we faced unprecedented escalation in commodity prices and the depreciation of the Indian Rupee. The supply chain disruptions and inflation were further exacerbated by the West Asia crisis in February 2026. Despite these headwinds, our diversified portfolio, strong market position, disciplined execution, and prudent financial management enabled us to navigate the environment while remaining focused on our strategic priorities. The foundation that we have built over the years continues not only to provide resilience, but also to support future growth investments. Supported by these strengths, we continue our journey towards transforming Blue Star into a ₹20000 crore enterprise in the near future. FINANCIAL PERFORMANCE In an environment marked by demand volatility and cost pressures, financial discipline remained a key priority. The Company reported revenue from operations of ₹12401.99 crores for FY26, representing a growth of 3.6% over the previous year. Operating profit increased by 6.2% to ₹930.41 crores, while operating margin improved to 7.5% from 7.3% in FY25, mainly owing to the Company’s focus on cost management. Our carried-forward order book stood at a record ₹6923.00 crores as of March 31, 2026, providing greater visibility across key businesses. Capital employed increased to ₹3258.41 crores from ₹2427.28 crores in FY25. Profit Before Tax (before exceptional items) stood at ₹741.94 crores in FY26 compared to ₹772.42 crores in FY25. During the year, the Company recognised a non-recurring exceptional item relating to the implementation of the new Labour Codes, as required by the ICAI Guidance Note. Post adjustment of the exceptional item, Net profit after tax for the year stood at ₹527.33 crores. The Company’s financial position remained healthy, and the Board of Directors has recommended a dividend of ₹8.50 per equity share for FY26. BUSINESS HIGHLIGHTS The Electro-Mechanical Projects business delivered robust performance, supported by demand from manufacturing, industrial infrastructure, and data centre projects. The Commercial Air Conditioning business maintained steady progress across key segments, supported by demand from healthcare, hospitality, education, and industrial applications. Custom Design and Manufacturing sales of heat pumps have commenced in North America and Europe and the outlook is positive for this new business. The Middle East business was directly impacted by the West Asia crisis and it is likely to take some time for it to recover. Annual Report 2025-26 9 CORPORATE OVERVIEW
The Room Air Conditioners business faced a challenging year, impacted by an early monsoon, a mild summer, and a temporary slowdown in demand following the GST rationalisation announcement. Despite these headwinds, demand recovered in the fourth quarter, supported by channel stocking ahead of the summer season and healthy primary offtake across regions. The Company also launched a comprehensive new range of Room ACs in Q4FY26, complying with the new BEE norms. Cost rationalisation measures taken throughout the year and deferment of certain discretionary costs helped in alleviating the adverse impact on profitability. The Commercial Refrigeration business was impacted due to the weather and faced margin pressures during the year owing to rising input costs and competitive market dynamics. The Professional Electronics and Industrial Systems business delivered a mixed performance during the year. The Medtech Solutions business was impacted by regulatory uncertainty, while Industrial Solutions recorded strong growth, driven by demand from the automotive and steel sectors. The Data Security Solutions business remained stable. THE WAY FORWARD FY27 is likely to present its share of challenges amidst persistent uncertainties. Ongoing cost pressures, currency depreciation, and subdued market sentiment arising from geopolitical developments in West Asia may continue to weigh on the operating environment. While these factors are expected to create shortterm constraints, our solid fundamentals and operational agility position us well to navigate the uncertainties ahead. One of the Company’s key strengths is its diversified portfolio across consumer, commercial, and international operations. This diversity provides multiple avenues for growth and enables us to respond effectively to evolving market conditions. At the same time, the long-term outlook for the country remains compelling. India is one of the fastest-growing major economies in the world, driven by favourable demographics, rising incomes, rapid urbanisation, expanding infrastructure investment, and evolving consumer aspirations. These factors are expected to drive cooling demand well ahead of that seen in many developed markets over the coming decade. The Room Air Conditioner industry represents a significant growth opportunity for Blue Star. Backed by a strengthened product portfolio, wider distribution reach, and enhanced customer engagement, we remain firmly committed to our aspiration of achieving a 15% market share. Underlying demand conditions also remain favourable in commercial refrigeration, supported by the expansion of organised retail, hospitality, restaurants and cafes, quick commerce, food processing, healthcare, and cold-chain infrastructure. The convergence of digitalisation and cooling infrastructure is also opening up significant opportunities for the HVAC&R industry. As investments in manufacturing, industrial infrastructure, and data centres continue to accelerate, demand for specialised cooling solutions is expected to expand meaningfully, creating attractive opportunities across our projects and air conditioning solutions businesses. International markets offer an important avenue for Blue Star’s future growth. During the year, we successfully developed and delivered advanced airto-air and air-to-water heat pump solutions targeted at North American and European markets. These offerings leverage our engineering and manufacturing Blue Star Limited 10
capabilities and address the growing global shift towards energy-efficient heating and cooling technologies. With India signing Free Trade and Bilateral Trade Agreements with multiple countries, we see meaningful potential for this business to scale, with an opportunity to generate additional export revenue of over USD 100 million per annum from FY28. IN CONCLUSION As we look ahead, I am confident of the prospects of Blue Star not only as a leading HVAC&R player in India and the Middle East, but also as a significant Custom Design and Manufacturing player for a few leading brands in the US and Europe. I would like to express my sincere gratitude to our Board members, employees, leadership team, channel partners, customers, suppliers, and shareholders for their unwavering support and belief in the Company. With a clear strategic direction, a consistent focus on execution, and confidence in the opportunities that lie ahead, we are well positioned to continue the Company’s growth journey and create lasting value for all stakeholders. Thank you for your continued support. Warm regards, Vir S Advani Chairman & Managing Director Annual Report 2025-26 11 CORPORATE OVERVIEW
BOARD OF DIRECTORS
Ashok M Advani Chairman Emeritus Suneel M Advani Chairman Emeritus 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, revenues multiplied more than 400-fold, and the Company established itself as a recognised leader in the air conditioning and commercial refrigeration industry in India. He retired from the Board in November 2016. In recognition of his exceptional leadership and legacy at Blue Star, he was appointed Chairman Emeritus. He continues to be an invitee at Board Meetings and remains deeply engaged with the Company as an advisor to both the Board and the Executive Management. 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). Annual Report 2025-26 13 CORPORATE OVERVIEW
B Thiagarajan Managing Director Vir S Advani Chairman & Managing Director Vir S Advani holds 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 then founded Blue Star Design and Engineering Limited in 2003, serving as its 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, he was appointed as the Managing Director of the Company, 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 at Blue Star. In his enhanced role, Mr Advani serves as the key interface between the Board and the Executive Management. He directly oversees various businesses and functions, including Professional Electronics & Industrial Systems business, 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 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 over 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 led Products and Service Businesses and many Corporate functions before being elevated to the Board in 2013. He was appointed as Joint Managing Director in 2016 before taking charge as Managing Director in April 2019. Mr Thiagarajan is a member of the Board of National Skill Development Corporation. He plays an active role in various industry forums. He is currently a member of the CII National Council and chairs the CII Skills Steering Council and CII National Committee on CSR. He also Co-chairs the CII National Committee on Technology, R&D, and Innovation. In the past, he has served as the National Chairman of the Indian Green Building Council, Chairman of CII Green Cooling Council, President of the Refrigeration and Air Conditioning Manufacturers Association (RAMA), and Chairman of both CII Western Region and CII Maharashtra State. Blue Star Limited 14
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 Oberoi Realty Limited and Emaar India Limited. Beyond his corporate roles, Mr Harish is actively involved with various educational and charitable trusts and is Provost of HSNC University. Mohit Sud Executive Director, Unitary Cooling Products Group Mohit Sud is an accomplished business leader with over two decades of experience in sales and marketing across India. At Blue Star, he holds end-to-end responsibility for the Unitary Cooling Products Group, which includes room air conditioners and commercial refrigeration products such as deep freezers, water coolers, visi coolers, and modular cold rooms. His responsibilities span the entire value chain, including sales, marketing, service, R&D, manufacturing, and supply chain. A mechanical engineer with an MBA from XLRI, Jamshedpur, Mr Sud brings extensive experience in sales, marketing, distribution, and business strategy. Prior to joining Blue Star, he spent over two decades at Hindustan Unilever, where he held multiple leadership roles across sales and marketing, managing diverse product categories including home care, beauty and wellbeing, across multiple geographies in India. In his last assignment as Vice President, he led premium retail distribution for the Beauty & Wellbeing business. He joined the Blue Star Board in April 2026. Annual Report 2025-26 15 CORPORATE OVERVIEW
Rajiv R Lulla Non-Executive Director Rajiv R 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, an independent strategic and financial advisory firm. Mr Lulla brings over 30 years of experience as a strategic advisor, investment banker, and corporate finance professional, specialising in mergers and acquisitions, capital raising, and corporate advisory. He has successfully completed transactions with a combined value exceeding $220 billion across a broad range of sectors including industrials, infrastructure, transport, telecommunications, and business services. Over the course of his career, Mr Lulla has held senior global leadership positions at Merrill Lynch, Crédit Agricole Group, and Deutsche Bank, with postings in New York, London, Paris, and Hong Kong. In addition to his leadership roles in global investment banking, he advises companies, investors, and stakeholders on strategic, financial, and corporate matters across multiple sectors. Mr Lulla joined the Board of Blue Star in December 2016. G Murlidhar Independent Director G Murlidhar, former MD of Kotak Mahindra Life Insurance, is a founding member who has been instrumental in shaping its growth journey. Over three decades, he has held leadership roles including Chief Financial Officer and Chief Operating Officer, driving operational excellence, governance, and strategic expansion. Under his stewardship, Kotak Life built a robust distribution network and service backbone that positioned it strongly in a competitive market. A Chartered Accountant, Cost & Management Accountant and Company Secretary, Mr Murlidhar has also completed the Advanced Management Program at Harvard Business School. His career spans finance, HR, IT, marketing, and consumer distribution, with experience in public issues and open offers across BFSI, services, and manufacturing. He brings a unique blend of technical expertise, strategic vision, and people-centric leadership to every role he undertakes. Mr Murlidhar joined the Board of Blue Star in January 2024. 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 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. Ms Murthy joined the Blue Star Board in April 2019. Anita Ramachandran Independent Director Anita Ramachandran holds a Master’s degree in Management Studies from Jamnalal Bajaj Institute of Management. She is a renowned Human Resource professional with deep knowledge and experience of about 40 years as a management consultant. She is also one of the first generation of women professionals to become an entrepreneur and run a highly successful HR consulting and services organisation. Ms Ramachandran began her career with AF Ferguson & Co. [AFF] (the KPMG network company in India then) in 1976 as the first woman consultant of the firm. In her 19-year stint with AFF, she worked in various parts of the country and across a wide range of functional areas. She was a Director at the time of leaving the firm. Ms Ramachandran founded Cerebrus Consultants in 1995 to focus on HR advisory services, including organisation transformation. Her reputation and innovative work helped her build Cerebrus into a firm with national presence, with the firm having worked with over 1000 companies in South Asia. Ms Ramachandran is known as an authority in reward management in the country. In recent years, she has been involved with several large organisations in South Asia for organisation transformation and talent management issues. Her wide general management consulting experience and insights on HR have enabled her to be a strategic advisor to many family groups. She also works with several PE firms and start-ups to mentor them through their growth journey. Ms Ramachandran is now additionally an Advisor with Mercer Consulting after the merger of Cerebrus with Mercer Consulting. Ms Ramachandran has been an Independent Director on boards of several large companies for over 20 years. She supports many organisations in the social sector through pro-bono professional work and remains deeply committed to work with women. She was also former Chairperson of TiE Women. Ms Ramachandran joined the Blue Star Board in June 2022. Annual Report 2025-26 17 CORPORATE OVERVIEW
Arvind K Singhal Independent Director Arvind K Singhal holds an Engineering degree in Electronics and Communication from IIT Roorkee, which also recognises him as a distinguished alumnus, and an MBA in Finance and Marketing from UCLA, USA. He is the Founder and Chairman of The Knowledge Company, one of India’s leading management consulting firms focusing on all major private consumption sectors including consumer products and retail, apparel and other lifestyle, and food and food services. He is also currently an Independent Director of Metro Brands Limited and Greaves Electric Mobility Private Limited. He joined the Blue Star Board in February 2019. 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, Bengaluru. In addition, he has been the past Vice President of Society of Indian 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. Blue Star Limited 18
M S Unnikrishnan Independent Director M S Unnikrishnan has over four decades of experience and is currently the Head and CEO of the IITB–Monash Research Academy, a joint venture between the Indian Institute of Technology, Bombay, and Monash University, Australia. He is a graduate in Mechanical Engineering from Visvesvaraya National Institute of Technology, Nagpur, and has also completed the Advanced Management Program from Harvard Business School. Prior to this, he served as the Managing Director of the Thermax Group, an Indian engineering major focused on energy and environmental solutions, with a manufacturing footprint spread across multiple locations in India and globally. Mr Unnikrishnan serves on the boards of KEC International Limited, Kirloskar Brothers Limited, Greaves Cotton Limited, and Livguard Energy Technologies Private Limited. He also serves as a trustee of The Akshaya Patra Foundation and Jehangir Hospital in Pune. He joined the Board of Blue Star in January 2026. 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. Annual Report 2025-26 19 CORPORATE OVERVIEW
INTEGRATED REPORT
Built on a foundation of market leadership, operational excellence, customercentricity, innovation, and responsible governance, Blue Star’s integrated approach aligns strategy, business performance, sustainability and stakeholder relationships to sustain its growth momentum. This section illustrates how these interconnected elements strengthen the Company’s resilience, enhance its future readiness, and create long-term value for all stakeholders. INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 21 Annual Report 2025-26
COMPANY OVERVIEW Backed by a legacy of engineering excellence and customer trust, Blue Star has established a strong presence across residential, commercial, and infrastructure segments. With over eight decades of expertise and an extensive market footprint, the Company remains a preferred choice in the HVAC&R industry, delivering reliable and technologically advanced solutions across India and global markets. Exterior view of the manufacturing facility at Wada, Maharashtra
For over eight decades, Blue Star has been a trusted name in India’s air conditioning and commercial refrigeration industry. Over the years, the Company has expanded its expertise across Mechanical, Electrical, and Plumbing (MEP) and firefighting solutions, building a strong reputation for engineering excellence and reliability. Guided by its core values of ‘Trust’and ‘Excellence’, Blue Star remains focused on innovation, quality, and operational excellence while addressing evolving market requirements and customer expectations. COOLING EXPERTISE Blue Star has established itself as a leading player in the cooling solutions industry, backed by deep domain expertise and a skilled workforce. The Company offers a wide portfolio of advanced air conditioning and refrigeration solutions across residential, commercial, and industrial segments. In the residential air conditioners segment, Blue Star has built a significant market presence following its entry in 2011. PROJECT EXECUTION AND MEP SERVICES Blue Star’s Electro-Mechanical Projects business delivers integrated MEP solutions for large commercial, infrastructure, and industrial projects across India. The Company’s expertise in executing complex HVAC&R projects has enabled it to develop strong project management capabilities, ensuring timely delivery, operational efficiency, and high execution standards. Its consistent performance and dependable delivery continue to strengthen customer confidence across sectors. INTEGRATED BUSINESS MODEL WITH END-TO-END CAPABILITIES Blue Star operates through a well-integrated business model that includes manufacturing, EPC services, and comprehensive after-sales support. This integrated approach enables the Company to provide comprehensive solutions across commercial buildings, industries, and infrastructure projects. It also enhances operational efficiency and allows the Company to respond effectively to varied customer requirements and project timelines. AFTER-SALES SERVICE EXCELLENCE Blue Star has one of the largest service networks in India’s HVAC&R industry, supported by its own service infrastructure as well as an extensive network of service partners. In addition to regular servicing, the Company offers retrofit solutions, revamps, duct cleaning, and operational support services. By using digital tools such as remote monitoring systems, mobile applications, and web-based platforms, Blue Star ensures efficient and timely customer support across locations. One of the largest service networks in India’s HVAC&R industry Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 23
GLOBAL FOOTPRINT Blue Star exports its HVAC&R products and solutions to over 20 countries across the Middle East, Africa, SAARC, and ASEAN regions, where its products are designed to perform effectively even in demanding climatic conditions. The Company has also strengthened its international presence through joint ventures in Qatar and Malaysia for executing MEP projects across residential, commercial, and infrastructure sectors. In addition, Blue Star has wholly-owned subsidiaries in the USA, Europe, and Japan, supporting its long-term global strategy. OTHER BUSINESSES Through its wholly-owned subsidiary, Blue Star Engineering & Electronics Limited (Blue Star E&E), the Company is engaged in the marketing, design, and maintenance of specialised electronic equipment and industrial systems. The subsidiary also provides refurbishment solutions for medical diagnostic equipment. Over the years, Blue Star E&E has established a strong presence in delivering advanced technology products and turnkey engineering solutions to a wide range of industries across India. MARKET REACH AND CUSTOMER PROXIMITY With a strong network of channel partners across India, Blue Star maintains a wide market presence and close customer engagement. Its extensive reach enables the Company to provide easy access to products, services, and support across regions, ensuring timely assistance and consistent customer engagement. MANUFACTURING EXCELLENCE AND INNOVATION Blue Star continues to strengthen its manufacturing capabilities through investments in advanced technologies, automation, and modern production systems. The Company and its subsidiaries currently operate seven manufacturing facilities across India, located in Ahmedabad, Dadra, Himachal Pradesh, Sri City (through its wholly-owned subsidiary, Blue Star Climatech Limited), and Wada. The expansion of manufacturing facilities at Sri City and Wada has significantly enhanced production capacity, supporting the Company’s future growth plans. Exporting HVAC&R products and solutions to over 20 countries Seven manufacturing facilities across India Blue Star Limited 24
Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 25
Precision sheet metal processing at Dadra Plant BUSINESS SEGMENTS Blue Star’s diversified business portfolio combines advanced air conditioning and refrigeration solutions with specialised technology offerings. Through its comprehensive range of products, solutions, and services, the Company addresses various customer requirements across multiple sectors.
ELECTRO-MECHANICAL PROJECTS AND COMMERCIAL AIR CONDITIONING SYSTEMS The segment comprises the design, installation, and maintenance of central air conditioning systems, including packaged and ducted systems, Variable Refrigerant Flow (VRF) units, scroll chillers, screw chillers, centrifugal chillers, and data centre chillers. It also provides turnkey contracting services across Mechanical, Electrical and Plumbing (MEP) and firefighting domains across buildings, factories, data centres, metro rail and substations. In addition, the division offers value-added services such as retrofitting, system modernisation, and ongoing operational support to enhance the efficiency and performance of electro-mechanical systems. UNITARY PRODUCTS This segment focuses on the development, manufacturing, and distribution of a wide portfolio of modern, energy-efficient room air conditioners designed for residential and commercial applications. It also encompasses an extensive range of commercial refrigeration solutions, along with air coolers. PROFESSIONAL ELECTRONICS AND INDUSTRIAL SYSTEMS For over seventy years, Blue Star has established a strong presence as the exclusive distributor in India for a wide range of internationally acclaimed manufacturers and has evolved into a system integrator and value-added reseller across MedTech, Data Security, and Industrial Solutions. This segment is managed by Blue Star Engineering & Electronics Limited, a wholly-owned subsidiary of the Company. The subsidiary also operates a medical diagnostic equipment facility at Bhiwandi, Maharashtra, which houses and supports a broad range of diagnostic imaging systems and spares, ensuring readiness, reliability, and efficient service support. In addition, Blue Star operates Customer Experience Centres in Pune and Chennai, focused on non-destructive testing, material testing and inspection solutions, along with customer demonstrations, training, and application support. Tandem H-Frame press machines in the fabrication shop at Sri City Plant Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 27
INDUSTRY STRUCTURES AND SEGMENTS India’s cooling and refrigeration industries remain on a strong long-term growth path, supported by favourable trends and expanding adoption. Blue Star remains well positioned to benefit from these favourable trends by sustaining market share, reinforcing category leadership, and investing in capabilities to capture emerging opportunities across both consumer and commercial segments.
AIR CONDITIONING The demand for room air conditioners continues to grow steadily, driven by rising summer temperatures across India and increasing disposable incomes amongst the expanding middle class. This growth is further supported by increasing adoption in Tier 3, 4, and 5 markets, replacement purchases, and customers purchasing ACs for additional rooms. Key drivers such as rapid expansion in the housing sector, accelerated adoption of renewable energy, and strong rural economic growth are also shaping the industry’s trajectory. Easier access to brandled consumer financing is further enabling faster adoption, especially amongst first-time buyers. Room air conditioners are increasingly emerging as an essential household appliance after televisions, refrigerators, and washing machines. The Company is making sustained investments in R&D, manufacturing, and supply chain capabilities to capitalise on these industry trends. In FY26, the industry was significantly impacted by unseasonal rains, as a large portion of demand comes from first-time buyers who typically purchase ACs during periods of intense summer heat. However, room AC penetration in India currently stands at around 10%, indicating a sizeable long-term growth opportunity, with at least 150 million households expected to purchase ACs in the future. This growth potential is reflected in projections that the annual market size will reach 30 million units by FY30. The overall industry was valued at `35500 crores in FY26, of which central air conditioning systems, including central plants, packaged and ducted systems, and Variable Refrigerant Flow (VRF) systems, accounted for `5500 crores, while room air conditioners contributed `30000 crores. During the year under review, the commercial air conditioning market registered a growth of 9%. Key growth drivers included the industrial, hospitality, healthcare, government, and infrastructure segments. COMMERCIAL REFRIGERATION Commercial refrigeration includes deep freezers, storage water coolers, bottled water dispensers, visi coolers and freezers, cold rooms, supermarket refrigeration systems, kitchen refrigeration equipment, and healthcare refrigeration products. Together, these solutions cater to a wide range of sectors, including horticulture, floriculture, banana ripening, dairy, ice cream, poultry, processed foods, quick service restaurants, HoReCa, sericulture, marine, pharmaceuticals, and healthcare. The industry is witnessing strong structural momentum, driven by growth in out-of-home consumption, the expansion of food retail and quick commerce, and the increasing need for reliable temperature-controlled storage and logistics solutions. Rising disposable incomes, higher consumption of fresh and frozen foods, and the rapid expansion of modern trade and convenience store formats are further supporting segment growth. Annual room AC market projected to reach 30 million units by FY30 Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 29
WIDE RANGE OF PRODUCTS Air Cooler Fixed Speed Split AC Inverter AC Window AC Blue Star Limited 30
Cold Room Deep Freezer Storage Water Cooler 31 Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS
Mini Bar Pastry Showcase Visi Cooler Bottled Water Dispenser Reach-in Chiller & Freezer Blue Star Limited 32
One-way Cassette AC Hi-wall AC Concealed Split AC Ductable AC Four-way Cassette AC VRF Side Discharge VRF V Plus VRF Lite VRF SYSTEMS Indoor units Outdoor units Annual Report 2025-26 33 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS
Air Cooled Ducted Split Indoor Unit Water Cooled Mini Series Indoor Unit Floor Mounted Packaged Indoor Unit Air Cooled Ducted Split Outdoor Unit Water Cooled Mini Series Outdoor Unit Inverter Packaged Outdoor Unit DUCTED ACs AND PACKAGED SYSTEMS Blue Star Limited 34
Centrifugal Chiller Water Cooled Screw Chiller Air Cooled Inverter Scroll Chiller Brine Chiller Data Centre Chiller Water Cooled Oil Free Chiller CHILLERS Annual Report 2025-26 35 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS
PRESTIGIOUS INSTALLATIONS HVAC and process piping works at India’s first commercial semiconductor assembly and test facility, Micron, Sanand Facilitating efficient operations with MEP works for Trimetro Factory, Bhubaneswar, Odisha Blue Star Limited 36
Enhancing passenger comfort through HVAC works at Noida International Airport Enabling efficient living spaces with MEP works for Garden City Verde, Bengaluru Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 37
Advancing digital infrastructure through CSA & MEP works for the 24 MW STT Data Centre, Pune Powering India’s future through one of the largest air-insulated substation projects at the 765 kV/400 kV/220 kV PGCIL Substation in Fatehgarh, Rajasthan Blue Star Limited 38
Enabling faster rail connectivity through Sub-Sectioning Posts (SSPs) for the 2×25 kV system on the Mumbai–Delhi route Water cooled VFD screw chillers and centrifugal chillers works at Yashoda Medicity, Ghaziabad Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 39
Screw chillers at Chennai Metro Rail Corporation VRF and ducted systems at Velammal Global School, Madurai Blue Star Limited 40
VRF and ducted systems at Apollo Hospital, Hyderabad Screw chillers at Sattva Horizon, Bengaluru Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 41
EXPANDING GLOBAL PRESENCE Blue Star expanded its international footprint by strengthening market access, enhancing customer engagement, and advancing sustainable HVAC&R solutions across key global regions. Supported by investments in innovation, manufacturing, and channel partnerships, the Company remains focused on delivering future-ready and energy-efficient solutions aligned with evolving international market needs. Showcasing Blue Star’s innovation at MCE 2026, Milan
(OEM) and Original Design Manufacturer (ODM) models centred around standard catalogue products, the Company collaborates closely with customers to develop solutions tailored to evolving regional requirements. This collaborative approach enables faster product adaptation, supports design-led differentiation, and addresses changing customer expectations linked to decarbonisation, refrigerant transition, and energy efficiency. The approach also shortens product development timelines and accelerates market readiness in the rapidly evolving HVAC&R segment. Key Offerings The product portfolio for North America and Europe includes: • Residential Air-to-Water Heat Pumps (monobloc and split configurations) • Refrigeration Condensing Units • Air-to-Air Heat Pumps including side discharge outdoor units, ducted, and ductless systems • Commercial Heat Pumps and Modular Chillers These offerings are designed to integrate seamlessly with customer systems while supporting energy efficiency, operational reliability, and sustainability requirements across diverse applications. Commitment to Technological Excellence and Innovation Blue Star’s international growth across North America and Europe is supported by sustained investments in research and development, backed by seven advanced manufacturing facilities and three innovation centres spanning over 1.2 million sq. ft. This integrated manufacturing and engineering ecosystem enables the Company to deliver precision-engineered, high-quality HVAC&R solutions aligned with its right-first-time philosophy. The infrastructure also strengthens the INTERNATIONAL BUSINESS With a focused strategy to strengthen its international footprint, Blue Star expanded its presence across key overseas markets through its wholly-owned subsidiaries. Operations through Blue Star North America Inc., Blue Star Europe B.V., and Blue Star International FZCO expanded the Company’s market reach across North America, Europe and the United Kingdom, the Middle East, Africa, SAARC, and ASEAN. These operations follow distinct business models tailored to the requirements of their respective markets. While the North America and Europe businesses focus on innovation-led growth through application-specific HVAC&R solutions, the Middle East, Africa, SAARC, and ASEAN businesses follow a distribution-led model, strengthening market access through channel partnerships. These developments reflect the Company’s longterm vision of building a strong international business aligned with the growing demand for energy-efficient and low-emission HVAC&R technologies. NORTH AMERICA AND EUROPE In North America and Europe, Blue Star continued to expand its presence through a customercentric Custom Design Manufacturing (CDM) approach focused on delivering applicationspecific HVAC&R solutions. Moving beyond traditional Original Equipment Manufacturer Trusted in over 20 countries Annual Report 2025-26 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS 43
Developing environmentally responsible HVAC&R solutions aligned with global decarbonisation initiatives Company’s ability to address evolving efficiency standards, refrigerant transition requirements, and application-specific market needs through technologically advanced and reliable solutions. Sustainability and Product Innovation Sustainability and energy efficiency remain central to Blue Star’s product development strategy. The Company focuses on delivering environmentally responsible HVAC&R solutions that support global decarbonisation initiatives, electrification trends, and evolving energy-efficiency standards. With a strong emphasis on heat pump technologies and low-GWP refrigerants, Blue Star offers solutions that address sustainable heating and cooling requirements across international markets. Backed by over eight decades of industry expertise, the Company works closely with customers to meet evolving application needs, delivering futureready solutions that respond to changing market demands and regulatory landscapes. Brand Building and Customer Engagement Aligned with its international growth strategy, Blue Star enhanced its brand visibility across Europe through participation in leading HVAC&R industry platforms. During the year, the Company participated as a Gold Sponsor at the EHPA Heat Pump Forum 2025 in Brussels and exhibited at Mostra Convegno Expocomfort (MCE) in Milan. These engagements enabled the Company to strengthen relationships with customers, partners, and industry stakeholders while enhancing visibility across European markets. Blue Star also showcased its capabilities in Custom Design Manufacturing, energy-efficient HVAC&R technologies, and low-GWP refrigerant solutions, supporting business development opportunities across the region. Future Outlook Global HVAC&R markets across North America and Europe are witnessing a growing transition towards energy-efficient solutions, sustainable heating technologies, and low-GWP refrigerants. Increasing regulatory emphasis on decarbonisation and energy performance is driving demand for environmentally responsible and application-specific HVAC&R systems. With its innovation-led approach, integrated manufacturing infrastructure, and strong alignment with evolving market requirements, the Company is well-positioned to strengthen its presence across North America, Europe, and the United Kingdom. MIDDLE EAST, AFRICA, SAARC, AND ASEAN Blue Star International FZCO, headquartered in the UAE, continued to strengthen its presence across the Middle East, Africa, SAARC, and ASEAN regions through the ongoing expansion of its distribution and dealer network. Blue Star International FZCO was impacted by the West Asia crisis. However, its strong distribution network and continued customer engagement will help reinforce its position in the region. The business focused on broadening market coverage across residential, commercial, industrial, and infrastructure sectors while strengthening channel partnerships in strategically important markets. During the year, the Company further extended its footprint Blue Star Limited 44
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