Blue Star sees strong long-term growth in AC market
Says India is shifting from import dependency—particularly on China—to a more localised manufacturing ecosystem
image for illustrative purpose
Hyderabad: Mohit Sud, Group President, Unitary Cooling Products at Blue Star Limited, expressed strong confidence in the long-term growth of India’s air-conditioning industry, even as the sector navigates near-term headwinds such as cost inflation, weather variability, and evolving consumer sentiment.
Addressing media in Hyderabad on Tuesday, Sud highlighted the strategic importance of southern markets for the company, noting that the region continues to be a strong growth driver. He also underscored the significance of Blue Star’s manufacturing footprint, particularly its greenfield facility, which currently has a production capacity of around 8 lakh units and can be scaled up to 12 lakh units if required.
Sud noted that India’s recent years, shifting from import dependency—particularly on China—to a more localised manufacturing ecosystem. Government initiatives such as quality control orders and production-linked incentives have accelerated this transition.
“Supply chains have been largely restructured towards domestic manufacturing, significantly reducing import dependency,” he said, adding that the Indian AC market is currently estimated at around 15 million units annually.
However, he acknowledged that certain critical components, especially compressors, still rely on imports. While progress is being made toward indigenisation, achieving full localisation could take another two to three years.
Blue Star currently has an in-house manufacturing capacity of approximately 1.4 million units, supplemented by outsourced production, taking its total annual capacity to about 1.6–1.7 million units. The company has also secured substantial land for future expansion, ensuring readiness to scale as demand grows. For the current financial year, Blue Star plans to invest around Rs60–70 crore in capital expenditure across its plants, primarily focused on maintenance, automation, and operational efficiency rather than capacity expansion.
In addition, the company is allocating about 1.2–1.3 per cent of its revenue towards research and development. Its R&D centres in Thane and an upcoming facility in Pune will focus on product design, energy efficiency, and innovation.
Sud flagged rising commodity prices and regulatory changes as key challenges for the industry. Input costs, including metals and packaging materials, have surged by over 30 per cent, while stricter energy efficiency norms are adding further cost pressures.
