Blue Star eyes Rs 1200-cr revenue from room AC seg in FY17

Air conditioner maker Blue Star today said it is eyeing revenue of Rs 1200 crore from room AC segment in financial year 2016-17, at a growth of 25 per cent.
"We expect to have a turnover of Rs 1200 crore from this segment in FY17. Right now, our revenue from room AC should be around Rs 1,000 crore," Blue Star Executive Director and President, AC and Refrigeration Products, B Thiagarajan told PTI.
The total AC market is estimated to be around Rs 15,500 crore, of which the room AC market is Rs 11,500 core. The room AC industry is growing at 10 per cent and is expected to grow by 15 per cent in FY 17.

"We have grown from 3.5 per cent market share in 2011 to 10.5 per cent in 2015. We aim to have a market share of 12 per cent in the room AC category," he added.
Thiagarajan said that more than 50 per cent of the sales comes from the tier III, tier IV and tier V cities.
Almost 40 per cent of the sales generally happens in the summer and Blue Star expects the prices of ACs to remain stable.

The company plans to invest about Rs 40 crore in marketing in the forthcoming summer season and Rs 30 crore in new product development as well as its research and development initiatives in FY17.

Presently, the company has nearly 70 exclusive product stores in the country and plans to increase it to 100 stores by the end of FY17.
"The company, which currently has five manufacturing facilities, would set up two more manufacturing units, one in Jammu and the other at Sri City near Tada in Andhra Pradesh, by investing Rs 215 crore, Thiagarajan said.
"The Jammu facility would be commissioned by March 2018, while Sri City unit is expected to get commissioned by March, 2017," he said.
Thiagarajan expects the share of the inverter ACs to grow
rapidly in the coming years.
"Inverter ACs currently constitutes 10 per cent of the total market. It will keep growing rapidly. In 2018, it will be 30 per cent of the total market and by 2020, it should be 50 per cent of the market," he said, adding that he expects all ACs to be wi-fi enabled by 2020.

The company recently forayed into the air cooler and air purifier categories and is expecting a market share of 10 per cent in the Rs 1,800 crore air cooler segment in FY17.
The air purifier market is estimated to be around Rs 275 crore, which is expected to grow to Rs 1,500 crore in 2020 and Blue Star aims to have 20 per cent market share in FY17 in the category.
The firm, which mainly sells a range of air-conditioning and commercial refrigeration products, clocked a revenue of Rs 3,080.79 crore in fiscal 2015 and exports contribute Rs 150 crore to the total turnover.

"We have an aim that once our turnover doubles, Rs 500 crore should come from exports," he said.
The first Blue Star Platinum Store, with display of the company's entire product range, would open in New Delhi in June or July this year.