Financials - Rs. Crore

2016-17

Total Revenue                                                                4,459.30

Profit for the Year (PAT)                                                   123.05

Segment Revenue

Electro-Mechanical Projects and Packaged                           2,122.54

Air Conditioning Systems

Unitary Products                                                                   2,003.92

Professional Electronics and Industrial Systems                       22.63

                                                      (Companyís Annual Report)

Blue Star Limited posted another year of splendid performance. On a standalone basis, the total revenue of the company increased by over 17 percent to Rs. 4183.47 crore as compared to Rs. 3585.77 crore in the previous year. Further, the net profit after tax was Rs. 111.97 crore as compared to Rs. 126.90 crore for the financial year ended March 31, 2016. On a consolidated basis, the company clocked a revenue of Rs. 4459.30 crore, a growth of 16 percent over the previous year. Further, the net profit after tax was Rs. 123.05 crore, registering a growth of over 17 percent.

The company operates in three key segments – electro-mechanical projects and packaged air conditioning systems, unitary products, and professional electronics and industrial systems.

Unitary products’ revenue in the year grew by 27 percent to Rs. 2003.92 crore as against previous year’s revenue of Rs. 1582.82 crore due to an early onset of summer in 2017. The performance of the room air conditioners business was impressively driven by the wide range of star-rated inverter split air conditioners. With a rise in preference for inverter ACs, the company continued to perform better in the category of energy-efficient products. Further, commercial refrigeration products such as water coolers, bottled water dispensers, and glass top freezers witnessed significant demand. Enhanced product penetration amongst the existing channels, coupled with a comprehensive range of products and aggressive promotional activities contributed to the growth and profitability in this segment. The market continued to witness an increased demand for display freezers. Sales of bottled water dispensers grew well as the company engaged with more retailers while storage water cooler sales also increased with enhanced demand from the educational, government, and manufacturing segments.

The company extended its product range by introducing water purifiers, air purifiers, and air coolers. The results of this segment grew by 26 percent from Rs. 165.13 crore in the previous year to Rs. 208.09 crore in the year in 2016–17.

The revenue of the electro-mechanical projects and packaged air conditioning systems business increased by 18 percent to  Rs. 2122.54 crore from Rs. 1797.48 crore. The company had earlier transferred the business of professional electronics and industrial systems to its subsidiary, Blue Star Engineering & Electronics Limited. However, due to customer and contractual requirements, certain contracts of this business needed to be executed by the company. The revenue generated by these contracts
during the year under review was 
Rs. 22.63 crore.

Significant developments. International business footprint expansion continues to remain a high focus area for the company. Blue Star added its presence in five countries – Kenya, Sudan, Vietnam, Iran, and Tanzania. The company continued its focus on expansion of its products export business.

Blue Star acquired land in Jammu and Sri City for setting up manufacturing plants in these locations, in due course. The company also expanded its product portfolio by entering into product adjacencies and product extensions such as water purifiers, air purifiers, and air coolers.

In 2016-17, the company was conferred multiple awards and recognitions, both international and national.

Ashok M Advani retired as the chairman of the company, with effect from November 30, 2016 and Suneel M Advani was appointed as chairman of the board.

 2016–2017 was a strong year for Blue Star in terms of all-round performance, despite major hiccups during the year such as demonetization, which threatened to upend the Indian economy, and poor investments in the manufacturing and construction sectors. Both revenue and profit grew hand-in-hand, which is a good indicator of robust growth. Significantly, Blue Star gained market share across all its businesses, and this was accompanied by improved customer satisfaction levels.

The air conditioning and refrigeration products business continued to perform very well, driven by our strong brand equity, enhanced distribution reach, and comprehensive portfolio of products. The room air conditioners business grew much faster than the industry growth of 20 percent, with Blue Star’s market share growing to 11.5 percent in this product category. Whilst the manufacturing facilities reported record production, the R&D team worked at incorporating state-of-the-art technology across the diverse product portfolio. The supply chain team delivered larger than expected cost savings, supported by a soft commodity market. Further, the company has strengthened its portfolio with its entry into the water purifier business and the export business, which are promising growth drivers for the future.

Unpredictability and volatility have become a part of all our lives, and we need to equip ourselves with agility and flexibility to deal with these difficult times. Instead of scaling back or retreating as many companies are doing, Blue Star is calmly and confidently making plans to expand its businesses, enter new markets, and launch new products.

Suneel M Advani
Chairman,
Blue Star Limited

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