India's Blue Star expects 25% jump in AC revenue from summer demand boost

Blue Star

04/03/2024 13:17

By Praveen Paramasivam
       CHENNAI, March 4 (Reuters) - India's Blue Star  BLUS.NS 
is targeting a 25% rise in air conditioner sales as
hotter-than-usual summer is expected to drive strong demand
during the season.
    "The indications are ... the summer season will be good (for
the AC segment)," Blue Star Managing Director B. Thiagarajan
told Reuters on Monday. A brighter economy is also expected to
boost AC sales, he added.
    The optimism comes after Blue Star's AC sales came in below
projections last summer due to a cooler-than-expected season,
prompting it to call the period "a disappointing one."
    Blue Star is launching new models and ramping up ad spend to
better compete with rivals such as Tata Group-owned Voltas
 VOLT.NS  and Japan's Daikin Industries  6367.T  in a crowded AC
market.
    The company is doubling its spending on ads to 400 million
rupees ($4.8 million), Thiagarajan said, as it jostles for
advertising slots on popular events such as the Indian Premier
League cricket tournament in the run-up to the country's general
elections this year.
    Although inflation is taking a toll on the consumer goods
sector, especially in rural areas, AC makers are likely to face
a smaller impact, since their customer base is mostly affluent.
    Thiagarajan said two-thirds of sales come from small cities
and towns, while first-time buyers purchase nearly 90% of all
its ACs.
    Blue Star also aims to close the year ending March with
revenue of roughly 100 billion rupees, Thiagarajan said. It had
reported 79.77 billion rupees last fiscal.


($1 = 82.8880 Indian rupees)

 (Reporting by Praveen Paramasivam in Chennai; Editing by Eileen
Soreng)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))