Blue Star launches 100 new ACs,eyes 12.5% market share in FY19

Leading air-conditioner maker Blue Star, which today launched as many as 100 models, is targeting to corner a 12.5 per cent market share in the room AC segment next fiscal year as it expects to grow above the industry average.
Currently the company enjoys 11.5 per cent market share in the Rs 12,000-crore/5.5-million-units room AC segment, of which around Rs 1,800 crore/0.9 million units per annum is the window AC market, while it enjoys over 30 per cent share in the industrial cooling space that's worth Rs 5,000 crore, joint managing director B Thiagarajan said.
Of the 100 models launched today, 40 are of inverter split ACs in the 3- and 5-star range, which lower power demand by up to 95 per cent.

"This range promises up to 30 per cent extra cooling power resulting in faster temperature pull-down and extra energy savings, precise temperature setting in steps of 0.1C and 0.5C, and soundproof acoustic jacket, meeting the 2018 BEE energy-efficiency norms," he said.
Blue Star, which turns 75 this year, entered the residential segment in 2011 and has since grown to enjoy a market share of 11.5 per cent. The company has a manufacturing capacity of 6 lakh units per annum.
When asked about industry growth, Thiagarajan told PTI that the 5.5-million-unit split AC market is growing at 12 per cent, while Blue Star is clocking over 17 per cent and he expects to clip over 20-25 per cent in January-June period.

"Though we are still much lower than the world average with only about 4 per cent penetration, I see the reach increasing very fast as there is better adoption for ACs now, especially in the small towns. As much as 52 per cent of my sales come from tier II and III towns and I see this continuing," he said.

Next year, Blue Star plans to increase its reach to 4,500 outlets spanning 550 cities. At present the company has 150 exclusive product stores, which is expected go up to 200 stores by the end of FY19.
About sales growth, Thiagarajan said, "We've consistently outperformed the market year-after-year since 2011. We once again expect to outperform the market and achieve a market share of 12.5 per cent in FY19. We had a 10.7 per cent market share in FY17."

On price hike ahead of good sales season with temperatures already hovering above the normal, he said the meet the price increase in the key raw material copper, the company has already increased prices by 5-6 per cent.
On capex, he said, the company had announced a Rs 260-crore capex for this fiscal, but that could not be completed due to the implementation of the goods and services tax (GST).
"The capex was announced to set up a plant in Jammu, but has since been shelved as the duty benefits are not available under the GST regime," Thiagarajan said, adding, "So, the investment will be carried forward to the next fiscal year.