Blue Star aims 15% share in residential AC market by FY25

New Delhi: Blue Star aims to corner around 15 per cent share of the residential air conditioner market in terms of value as the cooling products maker expands its product portfolio and distribution network, its Managing Director B Thiagarajan said on Wednesday.

The company is witnessing a pick up in the markets of West and South regions and expects a 20 to 25 per cent volume growth this season.

Blue Star, which is launching affordable products targeting the mass premium segment catering to price-sensitive and first-time buyers especially from non-metro towns, has introduced 75 products across the inverter, fix speed and window ACs.

"We are aiming for 20 to 25 per growth in volumes in AC business this year," Thiagarajan said at a press meet here.

According to him, the company targets to achieve a market share of 15 per cent by FY25 in the room air conditioner segment.

The domestic residential AC market is estimated to be around 8 million units and had a double-digit growth last fiscal. Blue Star is among the top five players in the segment.

Thiagarajan said there is plenty of headroom for growth in the segment as the penetration level in the Indian household is around 7 per cent only, which is very less in comparison to global standards.

"India offers significant potential for growth. Globally, around 150 million units of AC are sold. China's domestic market is 85 million units and total production is 110 million units," he said, adding there is a "big space" in the domestic market.

In India, 90 per cent of AC buyers are first-time buyers and 65 per cent of the total sales are from smaller non-metro towns. Moreover, 45 per cent of residential AC purchase is through consumer finance, Thiagarajan noted.

"The India AC market is largely driven by first-time buyers, middle class and aspirational buyers from small towns," he said.

The company, which entered the residential AC segment in 2011, currently gets around 30 per cent of its revenue from it.

In the financial year ended March 2022, Blue Star's revenue was around Rs 6,000 crore.

Besides, Blue Star is looking at opportunities emerging for electro-mechanical projects from multiple sectors for growth.

The company now on priority is also looking at new sectors such as data centre, railway electrification and water segment for growth in its electro-mechanical projects business, he said.

" We feel that we should focus on multiple segments to deal with rather than one," Thiagarajan said.

Last month, the company forayed into the railway electrification space after securing a contract worth Rs 500 crore, gets around 30 per cent of its revenue from electro-mechanical projects segment.