blue star ltd share price Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS

In the context of Blue Stars business operations and strategic proposition detailed in the Boards Report and the integrated Report, an in-depth analysis of the market environment, its operating businesses as well as financial performance, are enumerated in the ensuing sections of this report.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Blue Star is a leading player in the Air conditioning and Refrigeration industry, as well as the Mechanical, electrical, Plumbing & Fire-fighting (MEP) industry in india. An overview of the industry and the current market dynamics are described in detail in the integrated Report (refer industry Structure and Developments covered in the integrated Report on page no. 28).

SEGMENT-WISE ANALYSIS

The consolidated revenue and results break-up in terms of business segments for FY23 are as follows:

ELECTRO-MECHANICAL PROJECTS AND COMMERCIAL AIR CONDITIONING SYSTEMS

ELECTRO-MECHANICAL PROJECTS

The Electro-Mechanical Projects and commercial Air conditioning Systems business accounted for 50.34% of the companys Revenue from operations.

During FY23, the Electro-Mechanical Projects business witnessed a strong uptick in enquiries and order finalisations due to the governments thrust on infrastructure development and enhanced private capex. the company continued to secure healthy order inflows from across segments including Buildings, Metro Railways, Factories, and Data centres. During FY23, the company successfully forayed into Railway electrification and Water MEP projects. it bagged orders totalling Rs. 575 crores from prestigious customers namely West central Railway; cORE; and Metro Railway, Kolkata in the Railway Electrification sector; and orders totaling Rs. 375 crores in the Water Projects sector.

Blue Star, backed by its engineering prowess, proven project management expertise, and impressive track record of on-time/before-time completion of projects, remains committed to ensuring modern and best-in-class project management practices across projects executed by the company. Blue Stars expertise in this area truly resonates with its value proposition of Superior Project Delivery through intelligent Engineering, Modern Execution Practices, and committed Teams, due to which the company has been successful in executing many projects across diverse sectors such as Healthcare, Hospitality, Airports, Metro Rail, iT Parks, Factories, Data centres, and Pharmaceuticals, to name a few.

With a legacy of projects to its credit, Blue Star has been time and again recognised for its project management capabilities. Blue Star was adjudged as the MEP contractor of the Year 2022 for the successful completion of Mechanical, Electrical and Plumbing (MEP) works at the OLA Future Factory, Tamil Nadu. The project scope comprised complete MEP works including electrical, fire-fighting, plumbing, fire alarm and public address system, HVAc, and compressed dry air system piping, amongst others. This coveted award was given to Blue Star after meticulous scrutiny based on several parameters by an eminent jury which included renowned leaders from the construction industry across the country. in its eight years of participation, Blue Star has won this award seven times and was once declared as a runner-up.

Some of the eminent clients of the Electro-Mechanical Projects business during FY23 include ST Telemedia; Nippon Telegraph and Telephone; infinity Data centres through Tata Projects; Yotta Data Services; Princeton; Ola Electric Mobility; jcB india; Salcomp Manufacturing india; TcL india; indoSpace; Ascendas-Firstspace; Anthea Pharma; Kerry Foods; Lenskart; TPi composites inc.; Tata Steel; Steel Authority of india; Delhi Land & Finance (DLF); RMZ corp; LuLu Group; K Raheja corp; Embassy Group; Wells Fargo; Oberoi Realty; and Yashoda Hospitals; to name a few.

COMMERCIAL AIR CONDITIONING

commercial Air conditioning Business witnessed good demand from the Government, Healthcare, industrial & Educational segments. Besides, other segments which also contributed to the revenue of the business included the Builders & Developers, Hospitality, Office and Retail segments.

During the year, the business implemented various strategic initiatives including new product positioning, channel expansion and penetration in unrepresented territories.

The Company has been ahead of the curve on many fronts. For instance, the Government of India is planning to statutorily implement the Quality Control Order (QCO) for ducted systems and the Star Labelling Program for chillers during H2FY24 and Blue Star has already developed a complete range of ducted systems and packaged units which are complaint with these new norms. Blue Star has also launched a complete new series of scroll chillers which are compliant with the expected new Star Labelling norms. These two product ranges will help the Company to further consolidate its position in the ducted systems and chillers categories.

During the year gone by, the Company opened new Brand Shops in prominent locations across its potential market areas in various parts of the country. The business undertook many strategic marketing initiatives to strengthen its brand equity including participation in various coveted events such as ACREX 2023, the most prestigious event in the HVACR industry, held at Mumbai. Besides, in order to reward the Dealer fraternity, the business also successfully conducted the Star League Awards in Dubai where top performing dealers from FY20 to FY22 were recognised with Gold and Silver Awards. In all, 38 top performing dealers from across India received the prestigious Awards for their exemplary performance over the years.

The Company maintained its No. 1 position in Ducted Air Conditioning segment and No. 2 position in the VRFs segment, while it moved up to the No. 2 position in the Chillers product category. During the period under review, the Companys market share in VRF systems was 20% and in screw chillers it was more than 20%. The Company continued to dominate the ducted systems and scroll chillers categories with 46% and 40% market share respectively.

Some of the notable orders received by the business during the year were from Foxconn Hon Hai Technology India Mega Development, Chennai; Ahmedabad Municipal Corporation, Ahmedabad; Nouveau Diamonds, Surat; Avenue Supermarts, All India; and Brihanmumbai Municipal Corporation, Mumbai; amongst others.

INTERNATIONAL BUSINESS GROUP

With a strong focus on expanding its global footprint, the Company continued to consolidate its position in the international arena.

Despite the global slowdown, business and economic activities in the Middle Eastern markets continued to remain upbeat. The Company witnessed growth across all segments and territories with increasing demand for its new range of air conditioning and refrigeration products.

While the projects business at Qatar de-grew on account of restrictions imposed in the run up to the FIFA World Cup, the Company is witnessing an increase in inflow of enquiries and it is expected to return to a growth path in FY24. The operations of the joint venture at Malaysia continued to be impacted owing to a slowdown in construction and order finalisations amidst weak macroeconomic conditions in that country. Overall, Blue Star remains optimistic about its prospects, driven by the positive economic outlook in the GCC region and its focus on expanding its product range and exploring new markets.

In order to further expand its international presence, Blue Star incorporated wholly owned subsidiaries in North America and Europe during FY23. The Company continues to invest in R&D, product portfolio expansion and brand building in the different markets in which it is present.

UNITARY PRODUCTS

ROOM ACs

The Room Air Conditioners industry which was adversely impacted for two consecutive years due to the pandemic, finally witnessed a healthy summer and a significant pent-up demand. Owing to this, the Room ACs industry grew by 45% in FY23 over FY22 in value terms. Blue Star performed better than the industry thereby improving its market share to 13.5% in value terms.

Overall, the Company launched nearly 75 models across the spectrum of inverter, fixed speed, and Window ACs, and across price points to cater to every consumer segment. Being a tropical country, India faces summers where the external temperature can soar beyond 40?C in many locations. To make cooling more efficient and fast in such conditions, Blue Star now offers a range of Fast-Cooling ACs. While a typical air conditioner delivers its rated capacity at 35?C and derates at higher ambient temperatures, these ACs can deliver 100% cooling even beyond 35?C and up to 43?C, resulting in faster and more efficient cooling even in peak summers.

The new range is also embedded with various customer- friendly features and specifications such as Turbo Cool for fast cooling; Convertible 5-in-1 cooling where the customer can vary the cooling capacity upwards or downwards; NanoBlu Protect Technology and Hydrophilic Blue Fin coating, for both IDUs and ODUs, to prevent coil corrosion and leakage, and for longer life, respectively; Eco-Mode for energy-saving;Comfort Sleepfunction that auto-adjusts the AC temperature during night time for better comfort of occupants as well as for power saving; 4-way swing for uniformity; and self-Diagnosis for easy troubleshooting. Besides, these ACs have a metal enclosure for their Printed Circuit Boards (PCBs) to ensure additional safety. The entire inverter range uses R-32 eco-friendly refrigerant. All Blue Star inverter ACs are Smart Ready and can be upgraded to Smart ACs by the addition of a separate smart module.

Another important aspect of Blue Stars inverter ACs is that they have a wide operating voltage range, thus eliminating the need for an external voltage stabiliser. While this results in savings on the cost of the stabiliser, it also does away with the need for space to mount one beside the AC.

Flagship models with upgraded variants

The Company has launched a formidable range of flagship models comprising Super Energy-Efficient ACs, Heavy-Duty ACs, Smart ACs, ACs with Hot & Cold Technology, and ACs with Anti-Microbial Filter, to offer a comprehensive solution to any type of consumer need.

Blue StarsSuper Energy-Efficient ACsinclude a unique Dynamic Drive Technology to achieve enhanced energy-efficiency with optimised cooling by delivering high air flow volumes. As a result, the 1.5 TR Inverter Split ACs achieve a 5.41 ISEER, which is over 40% higher than any 3-Star Inverter AC.

Every year, India witnesses a steady rise in the temperatures across the country during peak summers. The Companys range of top-of-the-line Heavy-Duty ACs designed with superior specifications are extremely powerful, and can deliver faster cooling and comfort even at 56?C. These ACs also come with a powerful air throw of up to 50 feet and 4-way swing.

The Company has also rolled out a one-of-its-kind Smart Inverter Split AC range that has unique and smart features such as Customised Sleep where one can pre-set the temperature, fan speed and on/off of the AC during every hour over a 12-hour period. In addition, it offers a Scheduler, multi grouping of up to 15 ACs, and remote service support through an app. With Voice Command Technology, customers can operate their ACs through their smart devices such as Amazon Alexa? or Google Home? through English or Hindi voice commands.

The Companys ACs with Hot & Cold Inverter Technology can operate even in extremely low temperatures. Blue Star has developed one model which can operate at ambient temperatures of down to -10?C specifically designed for markets such as Srinagar, and another range that can operate at ambient temperatures of down to -2?C for locations in the rest of the country that face harsh winters.

Finally, the Companys new range that integrates comfort and health, ACs with Anti-Microbial Filter, can effectively filter out harmful microbes and particulate matter. These ACs can also operate as just air purifiers without cooling operation. This is a useful feature, especially in winters

The Company continues to make aggressive investments in e-commerce channels where it has been a prominent player and plans to sustain its investments in in-store demonstrators in retail stores, as this has been immensely helpful in enhancing offtake. Besides, it continues to adopt appropriate promotional methods, both online and offline, to enhance offtake across all tiers. Blue Star has supplemented its product and pricing strategies with robust distribution and service mechanisms whereby the product range including its after-sales service is available in all Tier 2, 3, 4 and 5 cities and towns as well as Tier 1 cities, so as to reach the mass premium markets effectively.

AIR COOLERS & WATER PURIFIERS

The Company also launched a new range of air coolers with a unique Cross Drift Technology and Dual Cool Technology that help in faster cooling during harsh and dry summers. The range comes with different water tank capacities, from 10 litres to 90 litres and boasts of best-in-class cooling efficiency. During FY23, the Company added several distributors to make deeper inroads into this category.

During the year under review, Blue Star continued to make significant progress in its e-commerce-led distribution strategy for the Water purifiers business. The Water purifiers business expanded its product portfolio to add a new series of products in the RO/RO+UV range in the entry/mid-level segment including an aggressively priced product range for e-commerce platforms. Several models with High Recovery Reverse Osmosis were launched, a feature that significantly reduces water wastage even while performing an efficient RO purification process. With new BIS standards in the offing, the Company will be in a position to immediately comply with the water recovery norms with this range.

COMMERCIAL REFRIGERATION BUSINESS

The Commercial Refrigeration Business has performed well in the period under review. The business continued to witness traction across all segments with an uptick in demand from the Food and Healthcare sectors. With a substantial pickup in travel and out-of-home consumption, Blue Star witnessed strong demand from Hotels, Restaurants and Quick Service Restaurants (QSRs) as well. Blue Star continues to be the preferred partner for major food chains such as Yum! Brands; Dominos; Devyani International; Burger King India; and Lite Bite Foods; amongst others.

The demand for Blue Stars kitchen refrigeration equipment and supermarket refrigeration products also grew, driven by the revival of the Hospitality sector and continued growth in demand from the Retail segment. the Company secured multiple orders from reliance retail and other retail players.

Blue stars wide range of hard top and glass top deep freezers gained excellent traction during the year on the back of increased demand from Dairy, Ice cream and Food processing segments. Notable orders were bagged from eminent clients such as Havmor; Vadilal; Amul; dinshaws; and Baskin robbins; amongst others. As part of the Companys strategic plans to reduce import dependency, Blue star commissioned a new state-of-the-art manufacturing plant for deep freezers at Wada and launched a new indigenised range of deep freezers. the indigenised range of best-in-class deep freezers, which is BIs certified under Quality Control order (QCo) of the Government of India, has gained good market acceptance.

storage water coolers and bottled water dispensers had a modest growth with demand from Industrial Canteens and Educational Institutions bouncing back. the overall market for the visi coolers category has also been good.

the demand for medical refrigeration products has been steady with notable orders received from research and scientific institutions such as IIT, Vedanta Cancer Institute, anthem Bioscience, Lambda research, RNTCp and the Institute of Liver and Biliary sciences, to name a few.

the cold room segment witnessed an uptick with increase in the dairy, Ice-cream and pharma markets. the Company secured some large cold room orders as well, making its headway into the large cold storage business space.

the Company continued to maintain its leadership position in the product categories of deep freezers, storage water coolers and modular cold rooms.

overall, the Companys Commercial refrigeration business with its strong and wide product range as well as solutions, and backed by an excellent pan-India sales and service network, holds excellent growth potential.

Blue star added several new customers in its National accounts Business during the period under review. the year saw order booking from customers in the retail, Banking, restaurant, Warehousing, Healthcare, and office space segments.

PROFESSIONAL ELECTRONICS AND INDUSTRIAL SYSTEMS

For over six decades, the professional electronics and Industrial systems (pEIs) business has been managing the exclusive

distribution in India of high-tech professional electronic equipment and services, as well as of industrial products and systems, from many internationally renowned manufacturers. over the years, the Company has significantly scaled up operations in this business and has moved up the value chain by changing its business model from being merely a distributor to that of a system integrator and value-added reseller. this business is handled by Blue star Engineering & Electronics Limited, a wholly owned subsidiary of the Company.

the pEIs business operates in three broad segments: MedTech solutions; data security solutions; and Industrial solutions which encompasses Material testing, Non-destructive testing (NDT), Metrology and Warehouse automation. the business has been successful in capturing the pulse of the market and has carved out profitable niches for itself in most of the specialised markets that the Company operates in.

FY23 being the first full year after two consecutive years impacted by CoVID, corporate spending across various segments that this business operates in saw an increase. the business managed to tap every opportunity that came its way and the revenue from all its segments including MedTech solutions, data security solutions, and Industrial solutions, was encouraging.

The MedTech business gained momentum in FY23 compared to the previous years, driven by increase in demand for diagnostic imaging equipment in smaller towns of India. the data security business did well on the back of various digitisation initiatives undertaken by major banks, certification authorities, and telecom and payment technology companies. the Industrial solutions business expanded its offerings on the automation front and won some notable orders from the steel and pipe segments, apart from bagging a few export orders during the review period from these segments. research centres too continued to place orders for a wide range of inspection equipment, helping this business clock good performance throughout the year.

During the year under review, the business continued to reorient its internal organisation structure with the intent to improve its focus on certain chosen customer segments and to scale up faster. the business also continued its thrust during the year into business development, marketing initiatives, brand-building, sales automation, service management, and project execution.

During the period under review, Blue star engineering & electronics Limited established two customer experience centres, one in thane, Maharashtra, for demonstrating its range of NDT solutions, and the other in Chennai, Tamil Nadu, for the

Demonstration of Material Testing equipment and automated Metrology Solutions.

During the period under review, Blue Star Engineering & Electronics set up its new medical diagnostic equipment refurbishment facility at Bhiwandi, Maharashtra. With a total area of 15,000 sq ft, this state-of-the-art facility is fully equipped to refurbish a wide array of pre-owned medical diagnostic imaging systems, including MRI systems and CT scanners.

MEDIUM-TERM AND LONG-TERM STRATEGY

strategy formulation for the medium- and long-term as well as its execution and review have always been a part of the Companys strategic planning process. the Board plays a key role in guiding and shaping the Companys medium- to long-term strategy. the Company regularly monitors and evaluates its internal strategies vis-a-vis the dynamic external environment and also evaluates the key strategic risks and opportunities that impact the Company and its business (refer Strategy Planning and Development covered in the Integrated Report on page no. 114).

FINANCIAL PERFORMANCE ANALYSIS

Following are the financial highlights of the Company for the year ended March 31,2023, on a consolidated basis:

After two consecutive summers disrupted by the Pandemic, the current year witnessed a normal summer without any restrictions. With business and economic activities back to complete normalcy, demand for the Companys products and services surged during the year. The sentiments in the Indian economy continued to be positive despite the geo-political uncertainties, the impact of the strengthening dollar on the currency/exchange rates globally and the rising interest rates across most geographies. Capex investments by both the public and the private sectors continued to be encouraging. Consequently, all the sectors that the Company operates in witnessed healthy growth and enabled the Company to end the year on a positive note with record revenue and profits. Consolidated financial performance analysis is provided below:

1. INCOME

All the Companys businesses performed well and posted record revenue during the year. With robust demand across segments, Blue Star ended the year on a strong note with the Total Income for the year ended March 31,2023, growing by 31.3% to Rs. 8,008.19 crores as compared to Rs. 6,099.80 crores in the previous year.

2. COST OF SALES, WORK BILLS AND SERVICES

The cost of sales, work bills and services during the year was Rs. 6,181.67 crores compared to Rs. 4,733.18 crores in the previous year. This cost declined to 77.5% of the Revenue from Operations compared to 78.1% in the previous year. Pressures on margin owing to depreciation of the Rupee was partially offset by easing in commodity prices, cost reduction initiatives and improvement in operational efficiencies.

3. EMPLOYEE REMUNERATION AND BENEFITS

Employee cost for the year at Rs. 591.44 crores increased by 16.3% compared to Rs. 508.55 crores in the previous year, in line with the increase in scale and annual increments. Employee cost was 7.4% of the Total Income compared to 8.3% for the year ended March 31 2022.

4. OPERATING AND GENERAL EXPENSES

Operating and general expenses increased to Rs. 711.43 crores from Rs. 475.88 crores in the previous year. The increase was largely on account of increased selling, general and administrative expenses, to support revenue growth. Besides, with the business and economic activities back to complete normalacy, many of the necessary business spends like travel, channel, training etc picked up. As a percentage of Total Income, the Operating and General Expenses for the year were at 8.9% as compared to 7.8% in the previous year.

5. FINANCE COST

Finance cost for the year was at Rs. 54.70 crores compared to Rs. 46.40 crores in the previous year. However, the finance cost for the year decreased to 0.7% of the Total Income compared to 0.8% in the previous year.

6. DEPRECIATION

Till Q2FY23, the Company followed the Written Down Value method of accounting depreciation. Since the Company had invested significantly into capacity expansion, it was decided to review of the expected pattern of consumption of future economic benefits embodied in Property, Plant and Equipment and consequently have a relook at the depreciation methodology. Based on a review conducted by third party advisors it was concluded by the Management that the straight line method of depreciation reflected better the pattern in which such benefits from use of the assets are expected to be consummated. Accordingly, the depreciation method was changed from the written down value method to the straight line method with effect from October 1, 2022. This led to a lower depreciation charge for the year by Rs. 18.11 crores.

Depreciation charge for the year declined to Rs. 84.78 crores compared to Rs. 85.98 crores in the previous year.

7. PROFIT BEFORE TAX

Profit before tax and exceptional items for FY23 increased by 53.3% to Rs. 384.57 crores compared to Rs. 250.90 crores in FY22.

Profit before tax and exceptional items improved to 4.8% of the Total Income compared to 4.1% in the previous year.

8. EXCEPTIONAL ITEMS

During the year, the Company was able to successfully conclude the sale of a large land parcel at thane, thus realising a gain of Rs. 170.81 crores.

9. KEY FINANCIAL RATIOS

Sr. No.	KEY FINANCIAL RATIOS	UOM	FY22	FY23	% change
1	Debtors Turnover Ratio	Times	6.1	5.8	-4%
2	Inventory Turnover Ratio	Times	4.7	4.8	3%
3	Interest Coverage Ratio	Times	6.4	8.0	26%
4	Current Ratio	Times	1.2	1.1	-4%
5	Debt Equity Ratio	Times	0.1	0.2	133%
6	Operating Profit Margin	%	5.7	6.2	8%
7	Net Profit Margin	%	4.1	4.8	17%
8	Return on Net Worth	%	16.8	30.7	83%

The Operating Profit Margin improved to 6.2% compared to 5.7% in the previous year due to cost reduction initiatives, operational efficiencies and economies of scale, which enabled improvement in profitability levels. Net Profit Margin and Return on Net Worth improved further owing to a decrease in depreciation and finance cost. Interest Coverage Ratio for the year improved to 8.0 (times) compared to 6.4 (times) in the previous year.

Return on Net Worth excluding the impact of Exceptional Items mentioned was 20.3%.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an internal control system, commensurate with the size, scale and complexity of its operations. In order to enhance the standards of controls and governance, the Company has adopted the COSO 2013 framework to ensure that robust internal financial controls exist in relation to operations, financial reporting and compliance. In addition, the internal audit function reviews and reports updates on compliance with internal controls, the efficiency and effectiveness of operations as well as key process risks, to the Audit Committee. During the year, as part of the Managements control testing initiative, the internal controls were tested and found effective.

RISKS AND CONCERNS

RISKS

The primary operating risks which could impact the Company relate to slowdown in the construction, environment and investment cycles, exposure to seasonality for some of its businesses like sale of room air conditioners, competition from Indian and global players, volatile exchange rates, rising interest rates, credit risks, import dependence, procurement concentration risks, volatile commodity prices , changes in tax and other legislations, inflation especially in the case of fixed price contracts, health and site safety, exposure to frauds, inadequate cybersecurity and changes in technology which impact the Companys product offerings. In addition, geopolitical scenarios also pose a business continuity risk, apart from a general slowdown in the global and local economy which tends to intensify risks faced by the Company.

Blue Star lays great emphasis on Enterprise level Risk Management, and has put in place a robust system for risk identification, assessment and mitigation with strong internal controls, at both the business-groups and corporate level in line with the COSO 2017 Enterprise Risk Management framework. Significant risks across the entity are reviewed periodically by the Risk Management Committee. Further, the mitigation action plans are integrated with the strategy and performance management processes, and also with the internal audit plans (refer Risks and Mitigation Strategies covered in the Integrated Report on page no. 110).

CONCERNS

A confluence of factors on the global and local fronts, such as geo-political equations between countries, the usage of tariff and non-tariff barriers to address trade imbalances and volatility in the prices of crude oil, commodities, currency, and ocean freight, could impact consumer confidence. The Company will continue to closely monitor the macro and micro level trends in the global and Indian economy, and will take necessary steps to address these challenges.

OPPORTUNITIES

The Companys proven ability to innovate and offer products/ solutions in line with the evolving dynamics continues to provide the Company with opportunities to grow even under the current challenging circumstances. These are opportunities related to the Companys products, projects and service businesses for varied sectors, and have been elaborated in the Integrated Report (refer Opportunities covered in the Integrated Report on page no. 117).

HUMAN RESOURCES

Blue Star has always remained committed to employee well-being. This year too, Blue Star continued its focus on the creation and maintenance of a safe and conducive environment for change management and business continuity across the organisation. the objective of employee well-being was implemented in a holistic manner, including the physical, mental and emotional ambit.

The Company received the coveted Great place to Work certification for the second time in a row with a trust Index of 81. This underlines the Companys endeavour to build high-quality relationships characterised by trust, pride, and camaraderie at the workplace-key drivers for a robust business performance. The Company strongly believes that in achieving the full human potential lies the path to reach its business potential in a sustainable manner.

With the objective of providing a highly conducive work environment meeting employee expectations and satisfaction, several policies were rolled out during the year under review with a focus on higher flexibility in work timings, and productivity rather than the hours clocked at workplace that enhances work-life integration; enhanced sponsorship of continuing education; augmented limits for vehicle purchase scheme, two wheeler loans and fuel reimbursement to support the extensive work-related travel; to name a few significant measures undertaken. Diversity, Equity & Inclusion (DEI) is an important expression of the Companys commitment to a fair and equitable workplace for all at Blue Star for several years.

Besides the focus on gender equity measures, the Company has embraced people with varied thought processes, backgrounds, and ages in the same workforce. Firm-footed steps towards nurturing DEI in the organisation were pursued as part of the 5 Star framework of Select, Support, Sponsor, Shape and Salute. Some of these initiatives include a special women leadership development program for focused career development platforms; Begin Again - a second career recruitment initiative to hire women who have been on breaks to address family commitments; a gender-equal Child Care policy aimed at supporting young employees with the best childcare facilities; and specific women support measures such as enhanced sick leaves, office transport facilities for outstation work travel and late evening work travel as well as ergonomic kits for maternity support, besides several others. there is a focused approach on hiring women across levels in the organisation, with noteworthy accomplishments such as over 45% women hired as part of campus recruitment, 55% women operators recruitment at the Sri City plant of the Companys subsidiary Blue Star Climatech Limited and 14% at Wada Deep Freezer Plant, besides 34% women workforce in administrative support. Two batches of the Leadership Development programme titled Spark with a focus on People Development as a Group Competency were well received by the leaders in the making. iLearn, an online learning portal with both technical and developmental programmes, extended the ease of learning at ones pace and time which was adopted by the employees in a large way. A digital Rewards and Recognition portal was well appreciated by employees during the year while under the aegis of Real people. Real Stories, employee narratives centred around the Blue Star Way were disseminated across the organisation and featured on the LinkedIn page of Life at Blue Star (refer Human Capital covered in the Integrated Report on page no. 66).

CORPORATE OUTLOOK

the Company reported record financial performance in FY23. During the fiscal year, Blue Star improved its market share in all the businesses, commissioned the Deep Freezer manufacturing plant at Wada and the Room Air Conditioner manufacturing unit in the Sri City Plant of the Companys subsidiary Blue Star Climatech Limited, enhanced its R&D capabilities, deepened its distribution reach, and set up wholly owned subsidiaries in the US, Europe, and Japan in pursuit of expanding Blue Stars global footprint. Blue Star is in its 80^th year of operations, and as in the past, it has not only reinvented itself post the Pandemic, but has emerged stronger. With the weather forecast indicating a strong summer combined with a strong carry forward order book for Blue Stars B2B businesses, the Company is optimistic about the prospects for FY24.

THE DYNAMICS OF BLUE STARS GROWTH

5 YEAR CONSOLIDATED FINANCIAL HIGHLIGHTS

		2022-23	2021-22	2020-21	2019-20	2018-19
OPERATING RESULTS:
Total income*	Rs. Crores	8,008.19	6,099.80	4,336.68	5,420.10	5,276.49
EBITDA (before exceptional items excluding other income & finance income)	"	492.78	346.47	239.81	282.78	346.54
Profit for the year after tax	"	400.69	168.00	100.66	143.70	190.40
Dividend (including corporate dividend tax)	"	115.58	96.30	38.53	116.11	115.92
FINANCIAL POSITION:
Share capital	Crores	19.26	19.26	19.26	19.26	19.26
Shareholders funds	"	1,333.84	1,020.54	887.86	784.67	874.89
Borrowings (Net)/(Net cash balance for 2021)	"	204.43	67.14	(151.45)	166.44	246.63
Net capital employed	"	1,530.33	1,060.12	688.92	869.36	1,013.97
PERFORMANCE INDICATORS:
Revenue growth	%	31.3	40.7	(20.0)	2.7	15.8
Gross margin	%	22.5	21.9	23.2	25.0	24.8
EBITDA growth (before exceptional items excluding other income & Finance income)	%	42.2	44.5	(15.2)	(18.4)	30.3
EBITDA margin (before exceptional items excluding other income & Finance income)	%	6.2	5.7	5.6	5.3	6.6
Cash from operations/EBlTDA	%	69.0	36.5	150.1	189.5	84.7
Earnings per share		41.6	17.4	10.4	14.9	19.8
Dividend per share		12.0	10.0	4.0	10.0	10.0
Book value per equity share		138.5	106.0	92.2	81.5	90.9
Debt equity ratio	Ratio	0.15	0.07	NA	0.21	0.28
Capital turnover ratio	Ratio	6.2	6.9	5.5	5.7	5.3
Return on shareholders funds**	%	30.7	16.8	11.6	18.6	21.4
Return on capital employed	%	33.9	33.9	26.9	25.4	29.8
OTHER INFORMATION:
Number of shareholders	Nos.	56,940	56,504	54,876	53,647	48,068
Number of employees	"	3,132	2,723	2,621	2,885	2,812

Note:

* Previous year figures have been regrouped wherever necessary to make them comparable with current year numbers.

** Return on Shareholders Funds excluding the gain on sale of Thane Land Parcel (reported as an exceptional income) in FY23 is 20.3%.