Blue Star Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

In the context of Blue Stars business operations and strategic proposition that are detailed in the Boards Report and 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 & Firefighting (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 FY24 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 49% of the Companys Revenue from Operations.

During FY24, the Electro-Mechanical Projects business witnessed a strong uptick in inquiries and order finalisations due to the Governments thrust on the ‘Make in India initiative, infrastructure development and enhanced private capex. The Company continued to secure healthy order inflows from across segments, including factories; data centres; malls; airports; IT/ITeS; hospitals; and offices. During FY24, the Company successfully entered the semiconductor segment by winning an HVAC order for Indias largest semiconductor plant in Gujarat. 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. Some of the eminent customers of the Electro-Mechanical Projects business during FY24 include names such as ST Telemedia; Nxtra Data Limited; Micron Semiconductor Plant through Tata Projects; Peerless Hospital; Jewar Airport; VR Mall; TCS; Godrej; Deloitte; Embassy Group; Medanta Hospital; V-Guard; Inorbit Mall; Indias first Lithium-ion Battery Manufacturing Plant by Exide; Mobile phone manufacturing and assembly facilities by Tata Electronics; and Marutis upcoming facility at Sonepat, to name a few.

Commercial Air Conditioning Systems

The Commercial Air Conditioning Systems business continued its growth in line with the market. The major contributions are from the Educational, Industrial and Government segments. The Company gained good traction in the indigenous manufactured centrifugal chillers business.

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

The Company introduced a new range of Quality Control Order (QCO) compliant ducted systems and packaged units during the year and successfully migrated to QCO ducted systems from October 1, 2023, as per the Government norms. Blue Star launched a new range of star-rated scroll chillers at the beginning of 2023 and developed a complete range of screw chillers, which are compliant with the new star labelling norms effective from July 1, 2024.

The business undertook many strategic marketing initiatives to strengthen its brand equity, including participation in various coveted events such as ACREX 2024, the most prestigious event in the HVAC&R industry, held at Delhi and other major events such as Climate Conclave 2024 at Bengaluru; IGBC at Chennai; and ACETECH at Mumbai. Besides, to reward the dealer fraternity, the business also successfully conducted the ‘Star League Awards in Sydney, Australia where top-performing dealers from FY23 were recognised with Gold and Silver awards. In all, 39 top performing dealers from across India received prestigious awards for their exemplary performance. The Company maintained its leadership position in the ducted air conditioning segment and remained in the top 3 in the VRF segment and chillers product category. During the period under review, the Companys market share in VRF systems was 21% and in screw chillers, it was around 24%. The Company continued to dominate the ducted systems and scroll chillers categories with 46% and 45% market share respectively. Some of the notable orders received by the business during the year were from Tata Electronics, Hosur; Emmvee Energy, Bengaluru; Foxconn Hon Hai Technology India Mega Development, Bengaluru; India Oil Corporation, Panipat; Geetanjali Hospital, Jaipur; Kalinga Institute of Information and Management Science, Bhubaneswar; Shiv Nadar School, Noida; Reliance Projects & Property Management, pan India; Avenue Supermarts Limited, pan India; RS Brothers Retail India Private Limited, Hyderabad; Shyam Group, Jamuria (West Bengal); and PES University, Bengaluru, amongst others.

International Business Group

The Company maintained its commitment to broaden its global reach by fortifying its position on the international stage.

Despite the global economic downturn, business activities in the Middle East markets remained resilient. The Company experienced growth across all sectors and regions, buoyed by heightened demand for its latest air conditioning and refrigeration offerings. The project business in Qatar experienced a decline after FIFAs conclusion and a sluggish restart of Malaysian joint venture operations faced challenges amidst a slowdown in construction and order finalisations, reflecting weak macroeconomic conditions in the country. Overall, Blue Star remains optimistic about its prospects, driven by a positive economic forecast in the GCC region and its ongoing efforts to diversify its product line and explore new markets. The unitary and applied segment registered a growth of 19% and 23%, respectively, across the MEA region.

The Company continues to prioritise investments in R&D, product portfolio expansion, and brand enhancement across various markets.

UNITARY PRODUCTS Room ACs

The Room Air Conditioners industry witnessed a tepid summer in 2023, especially in the North, where the weather was very pleasant and was frequented by unseasonal rains. Owing to this, the industry was flat in Q1FY24 as compared to the same period in the previous year. However, the industry grew well in the remaining quarters, and on a year-on-year basis eventually grew 20% owing to enhanced demand from first-time buyers and Tier 3, 4 and 5 markets. Blue Star performed better than the industry, thereby improving its market share to 13.75% in value terms.

Overall, the Company launched over 100 models across the spectrum of inverter, fixed speed, and window ACs, and across price points to cater to every consumer segment. The Company has launched three categories in the inverter split AC segment. These include flagship, premium and affordable ranges in 2-star, 3-star, and 5-star variants, which are available in various cooling capacities from 0.8 TR to 2.2 TR at attractive prices starting from

29,990.

The new ACs launched are embedded with various customer-friendly features. These include a new innovative feature called ‘AI Pro, which is a complex and intuitive algorithm that senses various parameters, adjusts, and delivers maximum comfort. In addition, these comprise features such as ‘Turbo Cool for fast cooling; ‘Convertible 6-in-1 cooling where the customer can vary the cooling capacity upwards or downwards; and Nano BluProtect Technology and Hydrophilic ‘Blue Fin coating, for both IDUs and ODUs, to prevent coil corrosion and leakage and for longer life, respectively. Some other unique features include DigiQ penta sensors that deliver unparalleled accuracy and reliability; a 4-way swing for uniform cooling; high cooling performance for fast and effective cooling; precision cooling technology for setting temperature at every 0.5?C and a PM2.5 filter with activated carbon for clean air. All Blue Star inverter ACs are Smart Ready and can be upgraded to Smart ACs with 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. The Company has launched a formidable range of flagship models comprising ‘Super Energy-Efficient ACs, ‘Heavy-Duty ACs, ‘Smart Wi-Fi ACs, ‘Hot & Cold ACs and ‘ACs with Anti-Virus Technology. Further, it has launched an 80th-year special edition AC to commemorate its legacy. This model is power-packed with comprehensive technologies and boasts several innovative features, making it the most advanced air conditioner available in the country.

Blue Stars ‘Super Energy-Efficient ACs include a unique Dynamic Drive Technology to achieve enhanced energy-efficiency with optimised cooling by delivering high airflow volumes. As a result, the 1 TR Inverter Split ACs achieves a 6.25 ISEER, which is 64% more energy-efficient than a 3-star Inverter AC.

Every year, India witnesses a steady rise in 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 55 feet and deliver 100% cooling capacity at even 43?C. The Company has also rolled out one-of-a-kind ‘Smart Wi-Fi ACs which have unique and smart features such as ‘Customised Sleep, where one can preset the temperature, fan speed, cool/fan mode and switch on/off the AC every hour for 12 hours for uninterrupted sleep. 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. ‘Hot & Cold ACs are designed to provide comfort all year round. Blue Star has developed one model that can operate at ambient temperatures down to -10?C, specifically designed for markets such as Srinagar, and another range that can operate at ambient temperatures down to -2?C for locations in the rest of the country that face harsh winter.

Finally, the Companys new range that integrates comfort and health, ‘ACs with Anti-Virus Technology, can effectively filter out harmful microbes and particulate matter. Customers can also operate these ACs as air purifiers, especially in the winter.

Blue Stars air conditioners, besides providing consumers with exceptional cooling even at affordable prices, are well-known for their quality, reliability, and durability. The year marked the completion of Blue Stars 80 years of existence. To commemorate this momentous milestone, the Company launched a host of limited-period special consumer offers. These included an 80-month warranty,Rs.80 per day EMI,

680 subsidised installation and several cashback and consumer finance offers on all ACs. The Company continues to make aggressive strides in ecommerce and modern trade channels where it has been a prominent player and plans to sustain its investments in in-store demonstrators in retail stores, as this has immensely helped in enhancing offtake. Besides, it continues to adopt appropriate promotional methods both online and offline, amplifying offtake across all tiers. The Company is also strengthening its distribution network, especially in the Northern Region.

Since the Companys foray into the residential AC segment in 2011, Blue Star has grown from strength to strength in this segment, outperforming the industry year after year. The Company targets to achieve a market share of 15% by FY26 in the Room Air Conditioners segment.

Air Coolers & Water Puri_ers

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 140 litres and boasts of best-in-class cooling efficiency. During FY24, the Company added several distributors to make deeper inroads into this category. During the year under review, Blue Star continued to make progress in its ecommerce-led distribution strategy for the Water Purifiers business.

Commercial Refrigeration

Commercial Refrigeration Products are divided into multiple solutions and categories: Merchandising solutions offer products like deep freezers, storage water coolers, visi coolers, bottled water dispensers, while other categories consist of Commercial Kitchen Refrigeration, Healthcare Refrigeration and Cold Storage Solutions. Commercial Refrigeration Business demonstrated exceptional performance across all product categories throughout the review period. The financial year gained significant traction from the dairy, ice cream, hospitality, and healthcare segments. As travel and out-of-home consumption bounced back, Blue Star witnessed immense growth from segments such as hotels, restaurants, and quick service restaurants (QSRs) as well. During the year, the Company launched indigenised range of best-in-class deep freezers, certified under the Quality Control Order (QCO) of the Government of India, and garnered excellent market acceptance. Blue Stars hard top and glass top deep freezers witnessed demand from ice cream and dairy segments. The Company secured orders for deep freezers from esteemed customers such as Havmor; Hocco; Vadilal; Amul; Mother Dairy; Dinshaws; and Baskin Robbins, amongst others. The Companys state-of-the-art manufacturing plant for deep freezers at Wada is now operating at full capacity to cater to the market demands.

During the year, Blue Star launched a new series of visi coolers (tropical coolers) to enhance its market reach in the segment and gained significant traction. The demand for storage water coolers and bottled water dispensers increased significantly with the revival in demand from industries, educational institutions and restaurants. The cold room segment witnessed an uptick driven by enhanced demand from warehousing; logistics; dairy; ice cream; and pharma markets. Notably, the Company secured substantial cold room orders from industry giants such as Snowman; DHL; Delhivery; Bharat Biotech; Coke; Intas Pharma; and Zomato, marking its foray into the large cold storage business space. The Company maintained its leadership position in the product categories of deep freezers, storage water coolers, and modular cold rooms and ensured significant growth coming from other set of categories. Blue Star continues to reinforce its strong market presence in the Commercial Refrigeration space. With a strong and diverse product range complemented by innovative solutions and an extensive pan-India sales and service network, the Company remains poised for continued growth.

PROFESSIONAL ELECTRONICS AND INDUSTRIAL SYSTEMS

For over seven 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 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; Warehouse Automation; and Electronics Assembly and Testing Solutions. The business has been successful in capturing the pulse of the market and has carved out a profitable niche for itself in most of the specialised markets that the Company operates in.

In FY24, the business maintained a steady performance in all its segments i.e., MedTech Solutions; Data Security Solutions; and Industrial. Despite facing challenges in the market landscape, it managed to tap every opportunity that came its way.

MedTech Solutions experienced a surge in momentum compared to previous years, driven by enhanced demand for diagnostic imaging equipment in smaller Indian towns. The Data Security sector thrived, buoyed by digitisation initiatives undertaken by major banks, certification authorities, telecom, and payment technology firms. Meanwhile, Industrial Solutions expanded its offerings and secured significant orders from the steel and pipe industries.

During the year under review, the business continued to realign its internal structure, focussing on key customer segments to accelerate growth. It intensified efforts in business development; marketing initiatives; brand-building; sales automation; service management; and project execution.

Blue Star Engineering & Electronics manages a cutting-edge medical diagnostic equipment refurbishment facility in Bhiwandi, Maharashtra. Spanning 40,000 sq. ft, this facility is well-equipped to refurbish various pre-owned medical diagnostic imaging systems, including MRI systems and CT scanners, further bolstering its commitment to excellence in healthcare.

MEDIUM_TERM AND LONG_TERM STRATEGY

Strategy formulation for the medium to 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. 87).

Financial Performance Analysis

Following are the financial highlights of the Company for the year ended March 31, 2024, on a consolidated basis: During this year, the Company built on the momentum of the previous year and performed exceedingly well in terms of both revenue and profitability. Strong demand for its existing products and solutions, coupled with the successful launch of several new products across key segments, and a robust carried forward order book, enabled the Company to end the year on a high note. Consolidated financial performance analysis is provided below:

1. Income

The Company posted a record revenue during the year on the back of strong performance by all businesses. With robust demand across segments, Blue Star ended the year on a strong note with the Total Income for the year ended

March 31, 2024, growing by 21.5% to Rs..9,732.78 crores as compared to Rs..8,008.19 crores in the previous year.

2. Cost of Sales, Work Bills and Services

The cost of sales, work bills and services during the year wasRs.7,391.97 crores compared to Rs..6,181.67 crores in the previous year. This cost declined to 76.3% of the Revenue from Operations compared to 77.5% in the previous year. Cost reduction initiatives, benign commodity prices and improved operational efficiencies helped in optimising the costs.

3. Employee Remuneration and Benefits

Employee cost for the year atRs.749.48 crores increased by 26.6% compared to Rs..592.15 crores in the previous year, in line with the increase in scale and annual increments. Employee cost was 7.7% of the Total Income compared to 7.4% for the year ended March 31, 2023.

4. Operating and General Expenses

Operating and general expenses increased to Rs..878.97 crores fromRs.710.72 crores in the previous year. The increase was largely on account of increased selling, general and administrative expenses, to support revenue growth. As a percentage of Total Income, the operating and general expenses for the year were at 9.0% as compared to 8.9% in the previous year.

5. Finance Cost

Finance cost for the year was atRs.58.08 crores compared to

54.70 crores in the previous year. However, the finance cost for the year decreased to 0.6% of the Total Income compared to 0.7% in the previous year.

6. Depreciation

In mid of FY23, the Company changed to Straight Line Method (SLM) of depreciation accounting. Accordingly, depreciation charge for the whole of the current year is on SLM as against only 6 months of FY23. Depreciation charge for the year increased to Rs..97.61 crores compared to Rs..84.78 crores in the previous year. The increase is mainly attributed to higher capitalisation on account of the start of commercial production at Blue Star Climatech Limited during the year.

7. Profit Before Tax

Profit before tax and exceptional items for FY24 increased by 44.9% to Rs..557.16 crores compared to Rs..384.57 crores in FY23. Profit before tax and exceptional items improved to 5.7% of the Total Income compared to 4.8% in the previous year.

Key Financial Ratios
Sr. Key Financial Ratios	UOM	FY23	FY24
No.
1 Debtors Turnover Ratio	Times	5.8	5.5
2 Inventory Turnover Ratio	Times	4.8	5.2
3 Interest Coverage Ratio	Times	10.8	15.1
4 Current Ratio	Times	1.1	1.3
5 Debt Equity Ratio (Gross)	Times	0.4	0.1
6 Operating Profit Margin	%	6.2	6.9
7 Net Profit Margin*	%	4.8	5.7
8 Return on Net Worth*	%	23.0	21.0

*Net Profit Margin and Net Worth ratios have been computed based on Profit after Tax (before exceptional items).

Explanation for variation for 25% or more is in Key Financial Ratios: Interest Coverage Ratio: This ratio improved to 15.1 (times) compared to 10.8 (times) in the previous year. The improvement is on the back of higher operating profits coupled with lower finance cost on account of QIP.

Debt Equity Ratio: QIP issuance has helped enhance equity based and lowered the debt levels resulting in improvement in debt equity ratio.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an internal control system, commensurate with the size, scale and complexity of its operations. 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. A well-established, independent, Internal Audit operates in line with the best-in-class governance practices. It reviews and reports to the Audit Committee about compliance with internal controls, the efficiency and effectiveness of operations as well as key process risks. 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 that could impact the Company relate to a slowdown in the construction, environment and investment cycles; exposure to seasonality for some of its businesses like the 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; environment; health and safety; exposure to frauds; inadequate cybersecurity and changes in technology, which impact the Companys product offerings. In addition, geo-political 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 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 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. 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

The Human Resources function in Blue Star has always focussed on industry-aligned, people-centric policies and processes while being quick to adopt technological interventions for agility and enhanced productivity. The balance between strong human connection and easy-to-use, self-serviced portals has been the bedrock of people interventions. The Company had a total of 2,815 permanent employees on its rolls as on March 31, 2024.

The focus areas in the year under review were to attract and develop talent, manage, and reward performance, and optimise workforce strategies. Voluntary attrition reduced to 15.6% in FY24 from 18.4% in FY23. The Human Resources teams in offices and factories ensured widely shared feelings of well-being and cohesion across the workforce with a plethora of planned engagements. Business-specific interventions, based on the ‘Great Place to Work survey conducted in January 2023, gained momentum during the year. ‘Synergy, a tailored initiative, encompassing meaningful connect and engagement as well as capability building for both on-roll and off-roll staff at project sites met with resounding success. The implementation of employee engagement initiatives such as ‘Sparsh and ‘Kutumb tailored for the spouses of workmen (operators), inviting them to the factory for an orientation on the history, values and culture of Blue Star and expressing gratitude for their support, has profoundly enhanced the assimilation of the organisational culture beyond employees and fostered stronger bonds with workmen colleagues. By extending such invitations, the Company not only acknowledged the pivotal role spouses play in supporting workers but also demonstrated a genuine commitment to their well-being. Conducting ‘Drishtikon - an engagement survey tailored for the industrious workmen reflects Blue Stars earnest commitment to understanding their concerns firsthand as well as in soliciting suggestions to enhance the working conditions. The results of the survey have been diligently analysed and shared with the plant leadership team, signifying the organisations transparency and accountability in addressing employee concerns. Moving forward, actionable insights gleaned from the survey will inform the development of comprehensive action plans aimed at addressing identified issues and implementing improvements.

A collaboration titled ‘Star Tech for technical training between Blue Star and COEP Technological University Pune has been a significant initiative in the year, demonstrating the Companys capability-building endeavours. This was spearheaded by a cross-functional team dedicated to crafting a curriculum aligned with industry needs. As a result, employees have been able to leverage their training to address operational challenges, drive efficiency improvements and pioneer best practices, thereby propelling the organisation towards sustained growth and success. As Blue Star endeavours to be a continually learning organisation, the Academy of Leadership Development clocked an average of 16 hours per employee whilst the Academy of Technical and Functional Excellence clocked an average of 9 hours/employee and 7 hours/channel partner. Programmes run during the year include ‘Emerging Managers Programme; ‘Senior Managers

Programme and ‘SPARK for middle-level managers. These initiatives focussed on building the related competencies for enhanced efficiency in managerial roles. Succession planning for critical roles and career pathing for high potential employees were pursued. ‘StarLead, a signature intervention with immersive learning sessions for a systematically shortlisted, top talent cohort across businesses and enabling functions was rolled out to develop earmarked competencies in young leaders for the near future. Recognising the significance of cross-functional mentorship in fostering talent development within the organisation, an internal mentoring programme, ‘Ignite Your SPARK was initiated during the year. Gender Diversity improved from 9.1% in FY23 to 10.6% in FY24, with targeted initiatives for women employees. Workplace flexibility, internal and external professional engagements, childcare policy, the ‘Women for Women support group and second career opportunities under ‘Begin Again proved to be effective towards this objective. Being mindful of gender biases during hiring and role allocations, an ecosystem with high psychological safety, gender-friendly initiatives, celebrating success stories of women leaders as well as listening circles for women were significant initiatives during the year. Blue Star is actively focussing on the development of women managers and leaders, offering them both internal and external growth opportunities. Their participation in numerous external learning platforms has consistently showcased Blue Stars excellence through their remarkable achievements. Blue Star is amongst the top 51 allies in 2023 in the ‘1000 Women Leaders Movement by Jombay.

Blue Star has engaged with social media platforms to create a strong employer brand through an intriguing showcase of initiatives, spanning engagement activities, recognition of innovation at work and laudable achievements through a systematic reward and recognition system as well as customised people programmes to suit respective business needs. These narratives spoke of widely shared feelings of well-being and cohesion across the workforce. Blue Star continued to lead the Glassdoor rating for the 6th consecutive quarter.

CORPORATE OUTLOOK

The Company reported a stellar performance in FY24 on the back of robust demand across businesses and geographies, buoyant festive seasons and new product launches. During the year, the Company continued to invest in the expansion of its distribution network, enhancing R&D by establishing an R&D centre in Japan and increasing manufacturing capabilities, which are helping to strengthen brand recognition. Fundraising through the Qualified Institutional Placement (QIP) route has helped fund some of these initiatives as well as strengthened the Balance Sheet profile. Given the changing weather pattern, resulting in hotter summers coupled with new and resilient product portfolio in residential and commercial air-conditioning and refrigeration, the Company is optimistic about its future business outlook. In FY25, the Company will continue to focus on growing faster than the market, margin improvement initiatives through a comprehensive Total Cost Management programme, prudent management on financial capital, leadership development and succession planning.

The Dynamics of Blue Stars Growth

5 YEAR CONSOLIDATED FINANCIAL HIGHLIGHTS

		2023-24	2022-23	2021-22	2020-21	2019-20
OPERATING RESULTS
Total Income *	Rs. Crores	9,732.78	8,008.19	6,099.80	4,336.68	5,420.10
EBITDA (before exceptional items excluding other	"	664.94	492.78	346.47	239.81	282.78
income & Finance income)
Profit for the year after tax	"	414.31	400.69	168.00	100.66	143.70
Dividend (Including corporate dividend tax)	"	143.93	115.58	96.30	38.53	116.11
FINANCIAL POSITION
Share Capital^	Rs. Crores	41.12	19.26	19.26	19.26	19.26
Shareholders Funds	"	2,612.63	1,333.84	1,020.54	887.86	784.67
Net Borrowings / (Net cash balance)	"	(455.93)	208.41	71.41	(149.30)	166.44
Net Capital Employed		2,156.40	1,534.31	1,064.39	691.07	869.36
PERFORMANCE INDICATORS
Revenue Growth	%	21.5	31.3	40.7	(20.0)	2.7
Gross Margin	%	23.7	22.5	21.9	23.2	25.0
EBITDA Margin (before exceptional items excluding	%	6.9	6.2	5.7	5.6	5.3
other income & Finance income)
Earnings per Share^		20.8	20.8	8.7	5.2	7.4
Dividend per Share^		7.0	6.0	5.0	2.0	5.0
Book Value per Equity Share^		127.1	64.9	49.6	43.2	38.2
Debt Equity Ratio (Net)	Ratio	NA	0.16	0.07	NA	0.21
Capital Turnover Ratio	Ratio	5.2	6.1	6.9	5.5	5.7
Return on Shareholders Funds**	%	21.0	23.0	17.9	11.9	17.2
Return on Capital Employed**	%	33.3	33.8	33.7	26.9	25.4
OTHER INFORMATION
Number of Shareholders	Nos.	74,698	56,940	56,504	54,876	53,647
Number of Employees	"	3,465	3,132	2,723	2,621	2,885

Note :

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

** Ratios calculated basis PAT (before exceptional items) and average Capital Employed / Net Worth for the year.

^ The Company has issued 1:1 bonus shares on June 20, 2023. To facilitate like-to-like comparison, ratios for previous years have been adjusted as per bonus ratio.