Saw good Onam sales; eye stellar festive season: Blue Star

Anuj: Your last quarter was quite decent, this quarter have you seen some more signs of recovery or does it remain quite slow in terms of the on ground action?

A: We have not seen kind of a recovery; at the same time past couple of weeks or right now is a wrong time to think anything or predict anything strategically because you will end up doing the mistake. I am of the opinion in the room air conditioners business or deep freezers business will continue to do well in this quarter also better than the market.

However, in the large commercial construction the electro mechanical projects or packaged air conditioning systems I don’t see the recovery at all. I think it is going to be a while before that market takes off. So we have been doing well in the unitary products. I think we will have the same kind of trend in the coming couple of quarters as well.

Ekta: What are the indicators that you are getting in terms of pre-festive buying at least as compared to say last year?

A: Very god, excellent, I am only surprised that say for example in the Onam sale we grew by over 95 percent over last year. So one of looking at is that of course our volume or market share had been low it is catching up but Onam sale is the first indicator in the festival season. Then the Ganapati follows and so on and so forth till New Year.

Going by what happened in Kerala that to during a period when there was a global turmoil in terms of markets it was very encouraging. Therefore, my optimism that in the residential purchases I do not see any kind of big disappointment. However, large construction industrial, big investments it is going to be a problem as is indicated by many other things that are happening unless and until one or two actions by the government can change the picture.

To begin with like everyone is saying interest rate could be one trigger which we can look forward to, Goods and Service Tax (GST) could be the second trigger. These two are possible though it is looking somewhat uncertain if these two actions happen, even the big projects will take off that is my view.

Anuj: In our last interaction you told us that you cut both the industry guidance and your own guidance for sales. Do you think with the kind of the environment that we are in right now do you think even that guidance is achievable or even that is that risk?

A: I hold on to my guidance what I provided last in a sense if the market is going to grow by 15 percent in the room air conditioner segment I said we will grow by 25. Market didn’t grow it is somewhat flat. Even the July figures are out the GFK figures. We have grown by 17 percent so far. So, therefore my 25 coming down to 15-17 I hold on to that it will happen.

On the industrial that is small commercial we have a breakthrough product now what is known as the 100 percent inverter variable refrigerant flow (VRF) through that also we will gain some more market share. So, I am not so much disappointed with what is happening in the markets due to global cues at all because as a business leader it will be a wrong thing to do your long-term planning or the year-end planning based on this particular thing. You will be always tempted to project it very badly. I am not in that mood at all. I am optimistic at the same time cautiously optimistic.

Ekta: You still stick by your 10-15 percent topline growth estimate for FY16 and your industry estimate was slashed quite sharply to 5 percent versus 15 percent?

A: I am talking about specifically the room air conditioners. 15 percent growth by year end I still hold on to.