Blue Star Eyes 20% Revenue Growth By 2024 End
Though Blue Star MD B Thiagarajan agrees festive demand won't equal that of the summer season, he expects it be on the higher side.
Blue Star Ltd. Managing Director B Thiagarajan expects the festive season to bring another demand surge for air conditioners. Talking to NDTV Profit, he said that while the demand is not as much as in the summer season, it is still on the higher side.
“The festive season demand started with Onam, which was not that great because of the Wayanad landslides. Going by what is currently happening in the markets, I think 20% revenue growth is easily possible during this season, starting today up to the new year,” the top executive at Blue Star said.
Even though the home electronics space in India has been subdued, that is not the case for the air conditioner category, Thiagarajan emphasised.
“We had an excellent summer season, where we grew more than 50% this year—an unprecedented growth. Post that, the demand continues to be good. It is not the same level as summer but we are seeing continued demand,” he said.
The air conditioning industry is seeing huge demand across the country, including from Tier-3, Tier-4 and Tier-5 markets, according to Thiagarajan.
He also explained the reasons why demand continues to grow in the air conditioner industry.
“The demand is happening because the penetration levels have been low in India, somewhere around 7–8% and it has to move up. It will more than double in the next four years. It is driven by that,” Thiagarajan said.
He attributed the higher demand to the urban heat effect. “Even in smaller towns, the temperatures are unbearable in summer. And during the rest of the year, humidity causes the issue. The homes do not have cross ventilation,” he said.
The running cost of air conditioners has reduced significantly in the past 15 years due to the energy efficiency programme, which according to Thiagarajan has facilitated deeper penetrations.
The Blue Star MD added that the recent supply chain issues, that the company faced due to increased demand, have also eased.
“Blue Star lost some sales in June because we could not cope with the growth of 70% each in April and May. But right now, there is no constraint in terms of supplies at all,” he said.
Shares of Blue Star Ltd. on Thursday ended 2.1% higher at Rs 2,140 on the NSE, sliding from an intraday high of Rs 2,175.90. In contrast, the benchmark Nifty 50 Index closed 2.12% lower.
