Window ACs, which are facing poor demand and low sales mainly due to strong response for split air-conditioners, are likely to go out of industry in the next three years, a top official of AC manufacturer Blue Star said today.
Window ACs, which are facing poor demand and low sales mainly due to strong response for split air-conditioners, are likely to go out of industry in the next three years, a top official of AC manufacturer Blue Star said today. "We expect demand for window air-conditioners to steadily decline in next three years as it happened in markets like Far East and China," Blue Star Ltd, Air-conditioning and Refrigeration Products Group President B Thiagarajan told reporters here.
The company, last year alone witnessed a 10 per cent decline in sales of window air-conditioners, he said, adding, due to the high operational cost, manufacturing companies may prefer to make split ACs than window air-conditioners. "Next year when the guidelines given by Bureau of Energy Efficiency come for renewal, it will be a testing period for air-conditioners. Since I have to fit everything in window air-conditioners (unlike split ACs) as per the norms of BEE, the price of a three-star rated window AC will overtake the price of a three-star split one. I think, window air-conditioners will become unbuyable," he said.
However, Thiagarajan said: "We will continue to stay in for window air-conditioners as well". 80 per cent of sales come from split ACs, while the remaining from window air-conditioners, he said. Observing that the overall demand for room air-conditioners fell by five per cent in 2012, he said, Blue Star registered a growth of six per cent in value terms despite the decline in growth of the industry. "Most of the growth came from residential segment" while commercial and corporate segments remained "sluggish", he said.
Stating that the future growth of room air-conditioners would be driven by demand from residential segment, he said the company has set a target of reaching a market share of nine per cent this year. On the inverter air-conditioners segment, which the company entered few years back, he said the company has witnessed some growth in its sales.
After unveiling the new range of three star rated air-conditioners here today, Thiagarajan said the company expects to sell 2.8 lakh units this year, if the industry grows by 15 per cent year-on-year basis.
Blue Star stock price
On August 22, 2014, Blue Star closed at Rs 352.70, up Rs 6.15, or 1.77 percent. The 52-week high of the share was Rs 367.05 and the 52-week low was Rs 131.55.
The company's trailing 12-month (TTM) EPS was at Rs 9.35 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 37.72. The latest book value of the company is Rs 58.88 per share. At current value, the price-to-book value of the company is 5.99.
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