Mumbai: Air conditioning maker Blue Star Ltd on Monday reported a modest rise in net profit, despite a fall in sales, as lower input and operating costs helped offset a business slowdown.
“In spite of unexciting revenues due to the business slowdown, Blue Star produced good results. We maintained record high operating margins by good supply chain management and controlled operating expenses. Finance costs were also substantially lower,” executive chairman Ashok M Advani said in a statement.
The maker of refrigeration and cooling sytems reported a quarterly net profit of Rs494.4 million on sales of Rs5.6 billion. This compares with a net profit of Rs449.5 million on sales of Rs6.45 billion a year ago.
“We are getting benefited as raw material prices had dropped earlier in the year. This is getting reflected in the results,” B Thiagarajan, president channel business group, told Reuters.
“The gross margins are up, expenses are under control, interest costs are under control, so the profit is looking up marginally,” he said.
Its operating margin increased to 11.5% in the quarter compared to 10.7% last year owing to tight control on operating costs and cost of sales.
However, revenues fell as certain segments such as IT, ITES, office and retail were still reeling under an economic slowdown, Thiagarajan added.
Blue Star offers services to a multitude of sectors such as banks, multiplexes, hotels, hospitals and governmental agencies.
Sales at Blue Star’s electromechanical projects and packaged A/C systems division, which contributes the most to sales, fell 12% to Rs4.17 billion.
Its carry forward order book as on 30 September, increased nearly 17% to Rs18.15 billion from Rs15.55 billion as at 30 September 2008, the firm said.
Blue Star shares ended down 1.67% at Rs360.15 in a weak Mumbai market.