Blue Star targets 9% of AC marketshare in ’13
Jan 21 2013 , Chennai
B Thiagarajan, president, air conditioning and refrigeration products group at Blue Star, said: “We hope to reach the target assuming that the market will grow by at least 10 per cent in 2013. Last year, the room air-conditioner market in India declined by about 5 per cent due to a mild summer coupled with pessimistic consumer sentiments. While these adverse conditions also impacted Blue Star’s room air-conditioners business, it still garnered 6 per cent growth in value terms and held on to its market share. While most players in this business resorted to price cutting, putting their margins under pressure, we maintained our prices and premium image focusing on profitability with an enhanced range of products.”
Blue Star reported Rs 598 crore revenue with Rs 5.37 crore net profit for the quarter ended December 31 compared with Rs 584 crore revenue with Rs 32.76 crore net loss for the corresponding period the previous year. For the year ended March 31, the company had recorded Rs 2,700 crore revenue with Rs 89.15 crore losses.
On Monday, Blue Star launched its latest range of ACs for the residential segment in Chennai. It now has 52 models in its portfolio across the window, split and inverter varieties. The price range is between Rs 17,000 and Rs 65,000, based on variety and star rating.
The company that mainly catered to the commercial segment started to aggressively focus on the residential AC business from 2011. Room AC is the largest product group manufactured by it, taking up about 80 per cent of Blue Star’s research and development time and effort, Thiagarajan said. While the industry mix is about 70 per cent residential and 30 per cent commercial, in terms of sales, Blue Star gets only about 55 per cent of its revenue from the room AC segment. It would strive towards reaching the industry norm, he added.
In order to meet the goals, the company plans to invest about Rs 30 crore on new product development and R&D initiatives in 2013. It has added 50 people to its existing R&D team strength of 125. Moreover, Blue Star would spend close to Rs 25 crore on advertising and marketing in the summer months in order to increase its room AC sales. It plans to reach out to about 500 locations across the country through 2,500 outlets.