Blue Star is India's largest homegrown air-conditioning and commercial-refrigeration company, and inside it sits a purpose-built data-centre business that is, on the evidence gathered for this report, the best-documented cooling-specific DC capability found anywhere in this series. Its Electro-Mechanical Projects Group (EMPG) offers end-to-end data-centre solutions — site assessment, master planning, design, civil/structural works, MEP, HVAC, execution and ongoing operations and facility management — spanning colocation, hyperscale, enterprise-class and edge data centres, and the company states its work is compliant with Uptime Institute and TIA-942 guidelines. That is a genuine, standards-referenced capability, not a marketing line grafted onto an unrelated business.
The wider numbers are solid on their face: FY26 consolidated revenue grew to ₹12,402 crore (from ₹11,968 crore in FY25), the Electro-Mechanical Projects segment that houses the DC business contributed 54.5% of FY26 revenue, and the company closed the year with a record total order book of ₹6,923 crore as of 31 March 2026 — management's own words call it a source of "greater visibility across key businesses." The Electro-Mechanical Projects segment-level order book stood at ₹4,664.5 crore at the same date. Neither figure disaggregates data centres from the segment's other demand drivers (industrial infrastructure, manufacturing-facility MEP work); the FY26 Annual Report names data centres as one of three demand drivers for the segment, not as a standalone reporting line.
Set against that record order book is a fact this report will not paper over: FY26 net profit actually fell, from ₹591 crore in FY25 to ₹527 crore in FY26, even as revenue rose and the order book hit an all-time high. Operating margin held roughly flat (7.5% per the Annual Report's more precise figure, versus 7% in each of the prior two years), and Q1 FY27 commentary explicitly cited rising input costs weighing on margins going into the new year. At the same time the stock trades at roughly 59.5x trailing earnings — not a cheap multiple for a year in which earnings went backwards.
Net: a HOLD. The EMPG franchise is real and well-documented, the order book is at a record, and governance structure (separate MD/CFO roles, a majority-independent board) looks sound on the evidence available — but a P/E in the high-50s for a company whose profit just declined is not a valuation this report can call cheap, and the tension between record order intake and falling profit is exactly the kind of unresolved margin question that argues against paying up further at current levels.
Blue Star is a mainboard NSE/BSE-listed company subject to the full SEBI LODR regime. Vir S Advani holds the combined title of Chairman & Managing Director (effective 1 April 2024), which triggers SEBI LODR's requirement that at least half the board be independent directors. Eight independent directors are named against a board of roughly fourteen members on the company's own governance-structure page — comfortably clearing the 50% threshold on that count — but this report could not confirm the exact certified board headcount and independent-director percentage as stated in the FY25-26 Corporate Governance Report itself, since the list used here was drawn from a website governance page rather than the filed annual report.
Despite the combined Chairman/MD title, day-to-day executive authority is shared with a separately- titled Managing Director (B Thiagarajan), and the CFO role (Nikhil Sohoni, Group CFO) is held independently of both — MD and CFO roles are not combined. Deloitte Haskins & Sells LLP serves as statutory auditor and Grant Thornton Bharat LLP as internal auditor, per the FY25-26 Annual Report. A dedicated related-party- transactions policy is published on the investor site (last updated ~29 January 2026).
Search results for Blue Star-adjacent credit ratings surfaced actions for "Blue Star Climatech Limited" (ICRA-rated) and "Blue Star Malleable Private Limited" (CRISIL-rated) — this report's research indicates these are likely separate, related group or promoter entities, not Blue Star Limited itself, and their ratings must not be conflated with the listed parent's. The company undertook several portfolio-reshaping moves in 2026 (proposed buy-in of the remaining 51% of Blue Star Qatar WLL in May 2026; a Business Transfer Agreement by subsidiary Blue Star Engineering & Electronics in August 2026; completion of a MedTech business sale in September 2026) whose detailed financial impact this report could not fully verify.
None confirmed as adjudicated matters, but this report could not verify the existence, status, or amount of any litigation or regulatory action against Blue Star Limited from the sources reached — this is an explicit disclosure gap, not a claim that no litigation exists. The Contingent Liabilities note in the FY25-26 financial statements and the Corporate Governance Report's litigation disclosures were not directly reviewed in the source research underlying this report.
Confirmation of the certified board composition and independent-director percentage from the FY25-26 Corporate Governance Report; retrieval of the full CareEdge rating rationale to confirm the actual letter grade (only a gearing commentary was found); resolution of the litigation/RPT-amount disclosure gap; and reconciliation of the "Hold" average broker rating against the Buy-leaning target prices from PL Capital and Trendlyne.
Structurally sound but incompletely verified. Separated MD/CFO roles, an apparently majority-independent board, and a stable (if short-term-only) credit rating are genuine positives found in this research. But an unconfirmed long-term credit rating, an unverified litigation position, and the need to keep Blue Star Limited's disclosures distinct from separately-rated group entities (Blue Star Climatech, Blue Star Malleable) mean several material items remain open. None of this changes the HOLD call, which rests primarily on valuation against a year of declining profit — but it does mean this report cannot call governance "clean," only "not adverse on the evidence gathered."
We use approach (b): CMP ÷ disclosed trailing P/E. FY26 EPS of ₹25.66 (screener.in) is consistent with the disclosed trailing P/E of ~59.5x against a CMP of ₹1,532 (₹1,532 ÷ 59.5 ≈ ₹25.75, a rounding-level match). Because FY26 profit actually fell despite the record order book, we do not assume a return to the company's own 5-year profit CAGR (~50%) is a reasonable forward base case; instead we apply modest, explicitly stated EPS-growth assumptions and vary the target multiple around, not above, the current trailing level, reflecting that a rich multiple is harder to defend against declining, not growing, earnings:
| Scenario | Target P/E | FY27E EPS (~) | Target price | Upside/(downside) |
|---|---|---|---|---|
| Bear | 45.0x | 24.4 | 1,098 | (28.3)% |
| Base | 58.0x | 27.7 | 1,607 | +4.9% |
| Bull | 62.0x | 29.5 | 1,829 | +19.4% |
Bear assumes FY27E EPS falls a further 5% (input-cost pressure persists, per Q1 FY27 commentary) with the multiple compressing to 45x as the market re-rates a second year of declining profit. Base assumes a modest 8% EPS recovery (order-book conversion partly offsets cost pressure) with the multiple holding just below the current trailing level (58x vs. ~59.5x), rounding to a target of ₹1,607 and +4.9% upside — within this report's HOLD band. Bull assumes a 15% EPS recovery with a modest multiple uptick to 62x, still below the stock's own 52-week-high-implied multiple. Named brokerage targets found in this research span a wide range: PL Capital (Buy, ₹1,873, initiated 2 July 2026, SoTP-based, ~44x FY28E P/E) and Trendlyne's average target of ₹1,765 sit above our base case; MarketScreener's ₹1,585-₹1,655 range and Simply Wall St's September 2026 trimmed average (₹1,650.84) sit closer to it; Livemint separately cites an average broker rating of "Hold," which this report's base case is broadly consistent with.
Upgrade triggers: FY27 quarterly results showing the PAT decline reversing with margins recovering above 7.5%; confirmation of a long-term credit rating (CRISIL or CareEdge) at or above the current implied credit quality; disclosure of a DC-specific revenue or order-book figure that shows the EMPG business scaling faster than the segment average. Downgrade triggers: a further PAT decline in FY27; continued input-cost pressure without offsetting price increases; or any adverse litigation/regulatory disclosure not currently reflected in this report's research.
| FY24 | FY25 | FY26 | |
|---|---|---|---|
| Revenue | 9,685 | 11,968 | 12,402 |
| Operating margin | 7% | 7% | 7.5% |
| Net profit (PAT) | 414 | 591 | 527 |
| Selected metrics | FY26 |
|---|---|
| ROE | 17.2% |
| ROCE | 21.2% |
| EMP segment order book (Mar-26) | ₹4,664.5 cr |
| Total company order book (Mar-26, record) | ₹6,923 cr |
Source: screener.in (18 Sep 2026), cross-checked against Blue Star's FY25-26 Annual Report (revenue ₹12,401.99cr, matching; operating profit ₹930.41cr / 7.5% margin, a more precise figure than screener's rounded 8%, used here).
Dart Consultants is a market intelligence and technology service provider, not a SEBI-registered Investment Adviser or Research Analyst. This report is educational material only — not investment advice, and not a recommendation to buy or sell any stock. The HOLD rating above is an educational device for summarising public information, not a regulated recommendation. The analyst(s) hold no position in, and have no banking, advisory or brokerage relationship with, Blue Star Limited, and have received no compensation from the company.
| 12-month target | ₹1,607 |
| CMP (18 Sep 2026) | ₹1,532 |
| Implied upside | +4.9% |
| Rating | HOLD |
| Market cap | ₹31,496 cr |
| P/E (trailing) | ~59.5x |
| Book value/share | ₹167 |
| ROE / ROCE | 17.2% / 21.2% |
| Credit rating | CRISIL A1+ (short-term) |
| Promoters | 36.49% |
| DIIs | 28.24% |
| FIIs | 12.75% |
| Public | 22.49% |
| FY24 | FY25 | FY26 | |
|---|---|---|---|
| Revenue | 9,685 | 11,968 | 12,402 |
| Operating margin | 7% | 7% | 7.5% |
| PAT | 414 | 591 | 527 |
