BlueStar MD upbeat on AC industry's growth amid record summer sales

BlueStar's Managing Director B Thiagarajan is confident that India will overtake China as the world's largest consumer of air-conditioners by 2045.

Speaking to The Federal, Thiagarajan discusses the heating, ventilation and air conditioning (HVAC) major's summer performance, increasing market share and intensifying competition within the white goods space.

Here are the excerpts from the interview:

How has this summer turned out so far for BlueStar?

The summer season this year set a new record not only for BlueStar but for the entire industry, with overall growth exceeding 50 per cent. The CII (Confederation of Indian Industry) national committee meeting on consumer durables and electronics highlighted the exceptional performance of the refrigerator and air conditioning sectors. The surge in growth underscores a strong demand for home comfort appliances and could signal positive trends for the industry’s future.

What’s BlueStar’s strategy to increase its market share within the room air conditioner (RAC) segment? Have you set any internal targets?

Our current market share stands at 13.75 per cent, and we aim to achieve 15 per cent by FY26. To reach this target, we will continue with our strategy of making our products affordable and relevant for every consumer segment. This includes enhancing domestic value addition, with our plant in Sri City having a capacity of 1.2 million units and having already surpassed 600,000 units in Phase 2. We will also focus on maintaining strong connections with our distribution network and furthering our brand-building efforts through our partnership with cricketer Virat Kohli.

The white goods space continues to remain extremely competitive. Are there any upgrades lined up that could potentially impact your competitive positioning?

India is a rapidly growing market for air conditioners, projected to more than double by 2030 and become the world’s largest by 2045, surpassing China. The competition will undoubtedly intensify. To stay ahead, we introduce new products each year focusing on energy efficiency, durability and advanced electronics. We have made significant progress and are optimistic about continuing our success.

While we understand RAC is BlueStar’s prime focus, how is the demand for the commercial air conditioner (CAC) segment?

We hold the number two position in the CAC market. Our market share has grown significantly, driven by strong performance in showrooms, boutiques and data centers, which demand extensive cooling solutions. Additionally, the widespread adoption of air conditioning in tier-2 and tier-3 restaurants is contributing notably to our success. Although our market is still relatively small compared to international benchmarks, we are achieving a robust growth rate of 15 per cent CAGR (compound annual growth rate).

BlueStar has significant exposure in the Gulf region too. What’s the business outlook there?

We are focused on specialised products such as water coolers and commercial air conditioning systems for villas. However, our presence in these segments is currently limited.