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Last Updated : Apr 05, 2019 04:41 PM IST | Source: PTI

Blue Star expects 15% growth in residential ACs this season

The company is witnessing healthy sales in the southern market this season, and expects a similar demand from northern and other regions because of harsh summer and pent up demand.

Leading air conditioner maker Blue Star is expecting around 15 percent growth in sales of residential air conditioner (AC) segment this year, a top company official said.

The company is witnessing healthy sales in the southern market this season, and expects a similar demand from northern and other regions because of harsh summer and pent up demand.

Besides, Blue Star is also spending around Rs 55 crore on advertising and brand communications this fiscal year to scale-up the demand.

"We continue to make significant investment in product development, after sales service, as well as brand building and are confident of enhancing our market share," Blue Star Managing Director B Thiagarajan told PTI.

He further added: "We are expecting a market growth of 10 percent in the room air conditioners this season for the industry and we would have around 15 percent growth."

The Indian room AC industry market is expected to be of around 4.5 million units with more than 15 companies competing in the space.

Blue Star expects the contribution from the northern market, which reports highest volume for the AC industry, to go up this season.

"Presently, north India contributes around 29 percent and south around 40 percent of our total AC sales. We expect contribution from north to go up to 32 percent," Blue Star President - Sales and Marketing Product Business C P Mukundan Menon said.

According to Menon, "the summer is going to be strong this year," as per the predictions and he expects people to buy more ACs.

Currently, the residential AC segment contributes around Rs 1,400 crore to Blue Star's total revenue.

The company, which ventured into the room AC segment in 2011, had reported a total revenue of Rs 4,433.34 crore in 2017-18.

According to Thiagarajan, India has a huge potential for the air conditioner segment as the penetration level is quite low at around 5 to 6 percent.

"There is enough space for us to grow as the penetration level in Indian households is very low compared to other countries," he said.

Taiwan has 90 percent penetration of residential AC, followed by the US with 87 percent penetration, he said.

"In our neighbouring (countries), China has a penetration level of 60 percent and Thailand has around 30 percent," Thiagarajan added.

Blue Star room ACs are available in 5,000 outlets at 575 locations. 52 percent of the company's AC sales come from smaller towns.

It plans to expand the network of its exclusive brand stores to 250 by the end of this fiscal from the existing 200.

The company, which is celebrating its 75th anniversary, has introduced 75 models of room ACs this year in the inverter and fixed-speed category.
First Published on Apr 5, 2019 04:30 pm
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