Questions across 6 calls

Nikhil Sohoni

Firm not listed in source transcripts

Blue Star Limited

Blue Star Limited CC-May26.pdf · 2026-05-07

Yes, sure. So, can you hear me?

Yes, so with regards to capex, see, the annual capex can be anywhere in the region of around RS.250 Crore to RS.350 Crore. So that's the normal spend that we have. When I say this capex, it includes all type of capex that is the normal routine capex, maintenance capex, investments in R&D, product development as well as whatever IT investments that we'll be doing. All of that will be in that region. As regards what growth we can expect for the next year FY'27, I think it is too early to comment. You already heard Mr. Thiagarajan that summer is just set in, and we would like to wait and watch because , it entirely depends on how the summer actually plays out to predict for the year.

Blue Star Limited CC-Jun25.pdf · 2025-06-30

So, as far as margins go, if you would have heard my commentary also, it was mentioned that when the volumes drop, definitely there is some amount of operating leverage benefits that you normally get will not be getting it in the current quarter. That said, last year's Quarter 1 was an exceptional quarter. So, definitely the economies of scale benefit were there. And hence, you are going to witness the contraction in the margins the moment the volumes have come down. In addition to that, the mix between various components within this segment will also have a role to play. So, it is not, of course, at a gross margin level will be a function of how the material costs have moved, which all of us are aware of. You know, the movements in copper, aluminum and what are the inventories available So, that is not going to impact it in a major way. Definitely most of this kind of comes from the play of volumes. So, that is as far as the overall margins go. Coming specifically to your question on what are the ad spends and all, that again kind of at the moment we see the volumes kind of de-growing. There is some amount of control which definitely comes on these spends. So, they will not be to the extent they were done last year. And accordingly, some contraction in those spends will also happen. So, there are certain unique expenses which also come every year, which are industrial -level expenses. We are aware of costs like e -waste, etc. also come. So , they will have a play on the margins. So, this margin drop which you are saying is a combination of all of this. So , it is not a gross margin impact. It is more an impact which comes because economies of scale and certain unique expenses which come every year.

That's right.

Blue Star Limited CC-Dec24.pdf · 2025-01-30

I will take the question on WJT. So, that arbitration, as you are aware, is in progress. There is a certain timeline to which the arbitration is working. As per that timeline, we were required to file a statement of defense which we have done. There are certain things on which the submissions have been done. And of course, we are confident, as we had told earlier also, that this company in which we were joint venture partners and which we had kind of exited almost seven years back, we have a very strong case, and the same thing holds today, too. So, I do not think there is any risk on that count. Of course, we will wait for the arbitration to play out. But the necessary timelines are being adhered to, and we are doing the filings as per the timelines.

As per the timeline, it will go for another around 12 to 15 months.

Blue Star Limited CC-Sep24.pdf · 2024-11-07

When you look at the gross margin, it will be inclusive of all businesses. And as we have reflected some time back, both Room Air Conditioner, commercial air conditioning and service, all will be part of this, in addition to of course the projects business and our Commercial Refrigeration business. So, that on a quarter-on-quarter basis, if you see last year, while it was around 24.8%, this year we have reported at around 26.5%. So, there is an improvement in that margin. This is in line with the margin improvements which you are seeing in EBIT and also which is reflected in the Segment-I as well as whatever improvement would have happened in RAC to a certain extent.

It is product mix as well as some amount of material cost also. There is a continuous re- engineering which anyway goes on, which also contributes to it.

Blue Star Limited CC-Dec23.pdf · 2024-01-31

So coming to capital spend, see, we will be continuing to invest as we have said, when we raised the QIP also. The spends will be going towards manufacturing, R&D, digitalization. So, all of these investments are on track , and as we grow these investments will also be happening on a continuous basis. Current year, we expect the spend is in the region of around Rs.350 Cr as of now in the nine months. And one good part is that all our manufacturing investments are modular, which means that as we see the demand go up, we can kind of continue investing in that capital expenditure. Same way, the product development is going to be the focus area and we will invest in product diversification and develop products both for international geography as well as for the domestic markets over here, We will also be investing in digitalization. So CAPEX is a given. You can take an annual CAPEX in the region of around anywhere between Rs.250 to 300 Cr going up to Rs.350 Cr at times. But that kind of capital expenditure will happen in the company now at least over next two to three years.

Utilization of the QIP?

Blue Star Limited CC-Sep23.pdf · 2023-10-31

Yes, on an immediate basis, the money will go for debt repayments. What it does is that it gives us the capacity to raise monies going forward when we actually do the spends. Keeping money idle would definitely not be a good financial proposition and therefore it will in the short term go to repay the debt. But the ultimate end use is what we already defined , that is, manufacturing, R&D and digitalization, and by repaying debt we are creating capacity for that.

The total capex, including maintenance and everything, will be in the region of INR 650 Cr over two years.