The last post on this company was in May 2025. Is it time to take another look at it? Also, the thread on cooling may be showing a way to us.Cooling May Be India’s Next Big Infrastructure Theme ⚡
I am writing this before its Q1, '27 quarterly results. As per the last results, the company was catering to three segments.
As per the company, it caters to three segments.
Let me confess that my attention to the company has been drawn by videoes which mention Blue Star as one of the major cooling companies into Data Centres. So, much of what I find and see is likely to be affected by confirmation bias. My particular reason for looking into it is because its main competitor, KRN Heat Exchanger is going at a PE of 118, which makes Blue Star, though expensive at 68, cheaper in comparison.
KRN Heat Exchanger manufactures customised heat exchangers and related products for the Heating, Ventilation, Air Conditioning, and Refrigeration sector. KRN has a B2B business model, supplying mainly to original equipment manufacturers (OEMs) like Schneider Electric and Blue Star.
Report dated February 02, 2026 by Mirae Asset-Sharekhan in the wake of the last quarter results has highlighted that the EMP Segment recorded a growth of 9% to Rs 1,696 crore but orderinflows has declined by 16.5% y-o-y. It also noted that, “Growth was aided by execution of projects from several sectors such as data centers and manufacturing. Order inquiries were strong, led by continued demand from factories, data centers, and healthcare sectors but order finalizations were muted. The commercial air conditioning business saw healthy order bookings on strong demand.”
Aluminium prices may affact the current quarter’s performance.
Here are some relevant factors about its role in Data Centres:
- Revenue Contribution: The company expects data centers to contribute approximately 10% of total revenue in the coming years (roughly ₹1,500 crore when total revenue hit ₹15,000 crore).
- Order Book: As of early 2026, Blue Star holds an order book of approximately ₹1,500 crore specifically for data center MEP projects.
- Technological Shift: The company is expanding beyond traditional AC units into high-margin precision chillers and liquid-cooling solutions tailored for the AI-driven data center boom.
Many analysts had downgraded the stock as it had reached the PE of as high as 91 in Jan '25. In February this year it touched 76.8. Blue Star currently holds significant market shares in key equipment required for data centers:
- Ducted Systems: ~50% market share.
- Scroll Chillers: ~45% market share.
- VRF & Screw Chillers: ~20% (holding the No. 2 position).
As per Mirae Sharekhan report of Feb this year, “Blue Star is well-placed to leverage on the opportunities in the domestic RAC and the
commercial cooling and refrigeration industry. The company also plans to exploreexports opportunities in countries like the US and Europe. We expect revenue/adjusted PAT to post a CAGR of ~13%/~14% over FY2025-FY2028E. At CMP, the stocktrades at ~48x/40x its FY2027/FY2028 EPS, respectively. We maintain a Buy rating and value the company on segment-wise SOTP basis on FY2026E EPS for a PT of Rs.2,100.”
The Motilal Oswal report of 17th April 2026, says, “From a medium-to-long-term perspective, the company is entering into a favorable phase marked by improving competitive positioning, benefits from backward integration, and a robust, diversified order book across infrastructure, commercial real estate, and data centers. It has strategically focused on high-margin verticals like factories, data centers, hospitals, and organized retail, driving faster execution and better client quality. Management’s consistent focus on execution discipline and capital allocation further reinforces earnings visibility and return ratios. We raise our EBITDA estimates by ~5% each for FY27 and FY28. We forecast a CAGR of ~17%/24%/32% in revenue/EBITDA/PAT over FY26-28, fueled by healthy growth across UCP and MEP & CAC businesses. We estimate OPM to expand ~50bp/30bp in FY27E/FY28E, led by positive operating leverage and cost-saving initiatives. At CMP, BLSTR trades fairly at a P/E of 54x/43x on FY27/FY28E. Our SoTP-based TP stands at INR1,950 (valuing UCP/EMPS at 45x each and PES at 25x FY28E EPS). Reiterate Neutral.”
Disclaimer: I have made a small investment in it.