AC Sales Zoom In TG, AP As Summer Heat Sets In Early

Hyderabad: While the sales of room air conditioner (AC) market in India is growing at 35 per cent, and at about 25 per cent in Telangana and Andhra Pradesh, Blue Star Ltd is witnessing 60 per cent y-o-y growth in both the Telugu states. Buoyant about AC sales during an extended summer here, the Company is set to add nearly 200 dealer outlets and deploy an investment of Rs 100 crore each year to ramp up production capacity at its manufacturing facility in Sri City in Andhra Pradesh.

At present, Blue Star, a Mumbai-based AC manufacturer has 10,000 dealer outlets in its network across India, out of which 1,400 are present in Telangana and Andhra Pradesh. The Company will be adding 500 outlets across India, of which 100 – 200 will be coming up in the Telugu states, by next year. The company is also ramping up production capacity in modules at its manufacturing facility in Sri City to reach 12 lakh units in the next few years.

“About Rs 100 crore will be invested every year towards the expansion of our 1st manufacturing facility in Sri City. The land and building is already present, hence the investment will go into the machinery. The production capacity at Sri City has already crossed 6.50 lakh units. We will be reaching nearly nine lakh units in the coming year. The plant capacity at Himachal has been frozen at 6.50 lakh units. Hence, the current total number of room ACs produced by Blue Star every year is 15 lakh units internally and three lakh units bought externally,” Managing Director of Blue Star Ltd, B Thiagarajan said.

The company has already invested in a second parcel of land located besides its 1st facility in Sri City. The construction of phase-one of Sri City-2 facility, spread across 40 acre of land, is likely to be completed by FY28, depending upon the growth and demand for room ACs, C Haridas, Executive Vice President, Sales & Marketing, Blue Star Ltd, informed adding that the new facility will support their room AC sales till 2030.

Across India 14 million units of room ACs were sold in CY24. It is expected to reach 15 million in the current year. The AC market is poised to grow at a CAGR of 19 per cent by 2030, with sales of 40 million units. Blue Star aims to sell a minimum of five million units by then, Haridas added.

In India’s room AC market Blue Star has managed to capture a share of 13.75 per cent, in which, the Telugu states put together contributes 11 per cent (Telangana and Andhra Pradesh individually contribute 5.50 per cent).

“While in some States we have 10 per cent market share, in Telangana and Andhra Pradesh we have a market share of 15 per cent. In these two States we stand second, after Tamil Nadu, whereas in India we are in the fourth position. These two States are critical for us. With our manufacturing facility in Sri City, it gives us the advantage to deliver the products here on time,” Thiagarajan said.

On a query about the AC variant that is hot-seller in Telangana and Andhra Pradesh, Haridas said that 5-star ACs and Smart Wifi ACs are in demand here while 3-star ACs are sold more in the North. “When I am talking about garnering 35 per cent of the total sales from Smart Wifi ACs in India, its sale is as high as 50 per cent in these two States. Consumers here are energy conscious. However, we are not big on sales in heavy duty ACs here, so we want to push heavy duty ACs this year,” he added. Blue Star introduced premium ACs in 2019, affordable premium in 2021-22, and affordable ACs in 2023. The company clocks 70 per cent of its sales from affordable premium category. The AC maker invested Rs 32 crore into R&D in the current financial year. It plans to invest Rs51 crore into innovation in the next fiscal. Blue Star had posted revenue earnings of Rs9,685 crore

in FY24.