Retail Demand Remains Strong, Says Blue Star
Blue Star, a leading consumer durables company, reports a strong performance in the room air conditioner market, where it holds a nearly 14% market share.
Vir S Advani, Chairman & Managing Director of Blue Star, emphasizes that despite rapid capacity expansion in the industry, the robust retail demand across the country is expected to absorb any potential oversupply. He anticipates that the structural shift in growth rates, if maintained over the next few years, will effectively balance market capacity.
The room air conditioner (RAC) sector experienced over 50% growth last season, reflecting a significant increase in consumer demand.
In the April-June 2024 quarter (Q1FY25), Blue Star reported a 103% year-on-year increase in consolidated net profit, reaching ₹169 crore. Revenue also saw a substantial rise of 29%, totaling ₹2,865 crore. This growth was driven by the launch of new air conditioner models, capitalizing on heightened demand due to record-breaking summer heatwaves.
Looking ahead, Blue Star aims for a revenue growth of 20-25% for FY25, with performance also contingent on festive season sales. The company expects its profit margins to remain stable at 8.5-9% throughout the year.
Blue Star is also focusing on the decarbonisation of its heating and cooling products for international markets. The pace of export growth will depend on how quickly global markets adopt these eco-friendly solutions. Advani notes that achieving substantial results in this area will require 5-10 years of dedicated research, development, and market acceptance.
For the near term, Blue Star will concentrate on strengthening its domestic market presence while maintaining a long-term vision for global expansion. The company’s current market capitalization stands at ₹32,296 crore.
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