Blue Star margin falls as costs outpace +13.27% revenue growth
Consolidated operating margin fell 1.53 percentage points year on year, while lower tax rate did not offset higher interest and depreciation.
Filed 06 Aug 2026, 14:32 IST · Blue Star Ltd (BLUESTARCO)
Key takeaways
- Consolidated revenue grew +13.27% YoY, but net profit fell -15.15% as expenses grew faster.
- Operating margin fell 1.53 percentage points YoY to 5.18%, 7.49 percentage points below the 12.67% sector-peer median.
- Other income contributed 22.09% of pre-tax profit, while the tax rate fell 2.14 percentage points.
Price around the results
Revenue growth did not translate into profit growth
On a consolidated basis, revenue increased +13.27% YoY, but expenses rose faster at +15.12%, pulling operating profit down -12.52% and net profit down -15.15% to Rs 102.51 cr. Sequentially, revenue fell -17.05% and net profit fell -54.88%, reflecting the weaker quarter after Q4FY26.
Higher costs and financing charges squeezed margins
Operating margin narrowed by 1.53 percentage points YoY and 2.83 percentage points QoQ because costs grew faster than revenue in both comparisons. Interest expense rose +33.76% YoY and depreciation rose +36.93%, adding to the pressure. The tax rate fell by 2.14 percentage points, but other income still accounted for 22.09% of pre-tax profit, making reported profit quality partly dependent on non-operating income.
Margin improvement has reversed, with Blue Star below its peer median
The 5.18% operating margin is down from 8.01% in Q4FY26, reversing the improvement from 6.71% in Q1FY26 to 8.01% in Q4FY26. Among 105 Consumer Discretionary peers that have reported, Blue Star's margin was 7.49 percentage points below the 12.67% median and ranked 15th from the bottom.
No post-results stock move is available yet
The results have not yet produced a recorded market reaction. Across the last eight results, the stock rose three times and fell five times, with a median absolute move of 4.14%, so its historical response has more often been negative than positive.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,378 cr | ₹4,072 cr | -17.05% | +13.27% |
| Other income | ₹30 cr | ₹45 cr | -34.11% | +102.80% |
| Expenses | ₹3,203 cr | ₹3,746 cr | -14.49% | +15.12% |
| Operating profit | ₹175 cr | ₹326 cr | -46.38% | -12.52% |
| Operating margin (%) | 5.18% | 8.01% | — | — |
| Interest | ₹13 cr | ₹23 cr | -41.59% | +33.76% |
| Depreciation | ₹57 cr | ₹48 cr | +17.40% | +36.93% |
| Profit before tax | ₹135 cr | ₹300 cr | -55.15% | -17.55% |
| Tax | ₹32 cr | ₹73 cr | -56.00% | -24.36% |
| Net profit | ₹103 cr | ₹227 cr | -54.88% | -15.15% |
| EPS (₹) | ₹4.99 | ₹11.05 | -54.84% | -15.14% |
Operating margin of 5.18% compares with a Consumer Discretionary sector median of 12.67% across 105 peers that have reported Q1FY27.
What to watch
- Whether consolidated operating margin moves back above 5.18%.
- Whether expenses grow slower than revenue after the current +13.27% versus +15.12% YoY gap.
- Whether other income's share of pre-tax profit remains around 22.09%.