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Demand for cooling appliances to rise 20%: Blue Star MD B Thiagarajan

B Thiagarajan also mentioned that the company had taken 2-3 percent price hikes in April across products.

April 12, 2022 / 02:09 PM IST
B Thiagarajan, Managing Director of Blue Star (Illustration: Moneycontrol)

B Thiagarajan, Managing Director of Blue Star (Illustration: Moneycontrol)

 
 
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Speaking to CNBC TV18, Blue Star MD B Thiagarajan says he expects the demand for cooling appliances to rise at least 20 percent compared to the summer of 2019.

When asked about the demand for cooling appliances in the summer season. The Blue Star MD mentioned that the demand for air conditioners (ACs) was good across the country.

"We are all excited about the summer season and not only Maharashtra across the country, in almost all the markets, the temperatures are soaring and the demand is good. The specific numbers will be disclosed on May 5 after the board meeting but March 2022 would be a very good month compared with March 2021 or March 2020 or March 2019. The summer season, I see that demand should be up at least by 20 percent compared with the 2019 summer. We are looking at around 25 percent growth. This is despite the price hikes," he said.

Also Read | Blue Star will go for some price hike by mid-April, says managing director B Thiagarajan

Thiagarajan further said he was optimistic of margins being better than Q3 levels, going ahead.

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He also mentioned that the company had taken 2-3 percent price hikes in April across products.

"There were three price hikes, March 2021, July 2021 and October 2021. Despite all that, the margin erosion was around 150 basis points, and we had indicated that the same level of margin should be carried through the summer. But then there was another price hike of commodities due to the ongoing geopolitical conflict and we have increased the prices from April by around 2-3 percent on various models. So with that, I think the margin should be slightly better than what it was in Q3, which will be relatively low as compared with March 2020. And I think the margin should be more or less for the full year, the same as March 2019. That is my estimate."

Also Read | AC makers expect double digit growth amid looming price hikes

Thiagarajan informed that till the summer season ends, all the materials have been bought and the reason for price hike is due to steel and aluminium as it is not bought in advance.

"The reason for the price hike is steel and aluminium which is not purchased in advance, so this 2-3 percent price hike has been taken," he said.

Thiagarajan also said that 40 percent of the sales take place around March, April and May.

"It picks up from March and till around June it continues, it tampers off from July. Over the years, we have seen festival season as reasonably good with betterment of e-commerce channels etc. But otherwise, 40 percent of the sales take place around March, April and May and 50 percent of the profit also comes around from these 3 months."

When asked about the adding fresh capex, he said, "We are going ahead with the commissioning of the Sri City plant, it should be inaugurated sometime in October or November 2022."

"Rs 220 crore has been invested and we are under the PLI scheme as well. So, all companies should be commissioning new facilities between 2022 and 2023," he added.



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first published: Apr 12, 2022 02:09 pm
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