Synopsis: The stock’s outlook remains steady as market share gains in key cooling categories, a strong project order book, and improving demand trends support medium-term growth. Despite near-term pressures from weak summer demand and regulatory uncertainties, rising penetration, new product launches, and robust commercial cooling leadership strengthen its long-term growth visibility.
India’s household appliances sector is booming, with the market estimated at around USD 75–80 billion in 2024 and projected to cross USD 130 billion over the next decade, implying roughly 6–8% annual growth. Rising incomes, urbanisation, rural electrification, and demand for smart, energy-efficient products are driving strong replacement and first-time purchases across both urban and rural homes.
With a market capitalization of Rs 36,189.23 crore, the shares of Blue Star Ltd were trading at Rs 1,760.40 per share, decreasing around 1.36 percent as compared to the previous closing price of Rs 1,784.75 apiece.
Motilal Oswal has maintained a neutral stance on the home appliance stock but remains optimistic in its bull-case scenario. The brokerage set a target price of Rs 2,240 per share, implying a 26% upside from the current level of Rs 1,770. This outlook reflects confidence in the company’s growth potential despite a cautious baseline view.
Market Share Momentum
Motilal Oswal highlights Blue Star’s strong progress in the RAC market, where its share has doubled to 14% in FY25 and is targeted to reach 15% by FY27. The company continues to dominate commercial refrigeration with over 31% share in deep freezers and cold rooms, reinforcing its leadership and long-term competitive strength.
The brokrage expects the company’s UCP revenue to dip 3% this fiscal because of an unusually weak summer that softened demand. However, it anticipates a sharp recovery ahead, projecting strong revenue growth of 19% in FY27 and 18% in FY28, supported by improving consumer demand and a healthier seasonal outlook.
Strong Segment Leadership
Blue Star continues to dominate the ducted AC and scroll chiller categories with a strong 45–50% market share, while holding the No. 2 position in VRF and screw chillers at 20%. Motilal Oswal expects a robust 15% revenue CAGR over FY26–28, supported by a solid order book and improving segment margins of 8.6% and 8.9%.
Financial & Segment Highlights
The company posted steady growth in Q2FY26, with revenue rising 6% to Rs 2,422 crore from Rs 2,276 crore a year earlier. Net profit inched up 3% to Rs 99 crore, reflecting resilient demand and stable operations, though margin expansion remained limited during the quarter.
Blue Star’s electro-mechanical projects segment remains strong with a healthy Rs 4,840-crore order book as of September 2025, supported by demand from buildings, data centres, and factories. Its commercial AC systems grew in line with market trends, maintaining leadership in ducted systems and strong positions in VRF and chillers. International business also gained traction in H1FY26, with future growth linked to India–US trade developments.
Further, Blue Star’s Unitary Products segment saw softer room AC demand due to an extended monsoon and GST-related deferments, but new launches are planned ahead of Summer 2026. Commercial refrigeration remains strong, supported by GST cuts and deeper penetration in Tier-2/3 markets. Industrial solutions continued to grow on manufacturing demand, while data security stayed steady. However, MedTech solutions faced revenue and margin pressure due to regulatory uncertainties.
Blue Star is one of India’s leading air conditioning and commercial refrigeration companies, known for its strong presence across residential, commercial, and industrial cooling solutions. With a growing product portfolio, robust order book, and expanding international footprint, the company continues to strengthen its leadership through innovation, energy-efficient technologies, and diversified customer segments.
Written by Abhishek Singh
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