Blue Star Q4 net profit squeezed to Rs 8.9 crore due to COVID-19 lockdown
May 12, 2020
Mumbai (Maharashtra) [India], May 12 : Air conditioning and commercial refrigeration major Blue Star on Tuesday reported a sharp erosion in its net profit for the quarter ended on March 31 to Rs 8.9 crore due to significant market disruptions caused by the spread of COVID-19.
In Q4 FY19, it had posted a net profit of Rs 79.84 crore.
The company reported revenue from operations of Rs 1,299 crore in Q4 FY20 compared to Rs 1,596 crore in the same period of the previous year.
The operating profit (PBIDTA excluding other income and finance income) decreased to Rs 37 crore from Rs 109 crore in the same period last year primarily due to lower profits resulting from significantly reduced sales in March.
"While the demand had taken a hit due to the national lockdown, we are hopeful that there will be gradual recovery from May onwards," said Vice Chairman and Managing Director Vir Advani.
With tier 3, 4 and 5 towns, which are comparatively less impacted, accounting for close to 60 per cent of the revenue for unitary products, the company hopes to partially make up for the lost summer season sales.
The demand for our commercial refrigeration products, specifically from the healthcare, pharmaceuticals, processed food and food delivery sectors is growing, said Advani.
"While two of our factories have opened with partial strength, we are planning to open the other three factories in June. Roughly 10 per cent of project sites have also opened," he said.
"While Q1 FY21 will be a challenging quarter, given the strong fundamentals and diverse portfolio, the company is well-positioned to regain lost ground from Q2 onwards."
Meanwhile, Blue Star said several cost reduction plans have been implemented along with liquidity improvement measures.
Simultaneously, the company is working on a few emerging opportunities like developing hi-tech indoor air quality management solutions and accelerating its indigenisation plans in the post-COVID-19 era.
