Blue Star Forecasts Doubling of India AC Industry in Four Years

According to Blue Star’s annual report, the air-conditioning industry in India, valued at around ₹27,500 crore (USD 3.3 billion), is projected to double in the next four years.

Blue Star Chairman & Managing Director Vir S Advani stated that the Indian HVAC&R (heating, ventilating, air conditioning, and refrigerating) sector is poised for exponential growth.

Blue Star Reasons for Growth:

This anticipated growth is attributed to factors such as the “low penetration” of room air conditioners and the burgeoning middle-class consumers with “high disposable incomes,” particularly from smaller Tier III, IV, and V markets.

“The overall Indian AC industry (residential and commercial), currently valued at around ₹27,500 crore, is likely to double in the next four years,” Advani mentioned in his address to the company’s shareholders in the annual report for 2023-24.

Changing Weather Patterns and Product Innovation:

The company is “optimistic” about its future business outlook, given the changing weather patterns resulting in hotter summers and a new and resilient product portfolio in residential and commercial air conditioning.

Blue Star has implemented a three-year strategic plan to strengthen its core capabilities, acquire new ones, build new processes, and adopt innovative technologies.

Strategic Investments and Focus Areas:

Blue Star has detailed its investments to support these growth plans. “In FY25, the Company will continue to focus on growing faster than the market, margin improvement initiatives through a comprehensive Total Cost Management program, prudent management of financial capital, leadership development, and succession planning,” the report stated.

Leveraging Consumer Insights and Brand Equity:

The company expects its strong consumer insights of the domestic market, expertise, network of channel partners spread over 900 towns, and strong brand equity to position it well to leverage the opportunities that scale will bring.

“This will necessitate substantial investments in sales and distribution, R&D, manufacturing, supply chain, and digitalization,” the report added.

Blue Star Revenue Growth and Market Share:

Blue Star ended FY24 with revenue growth of 21.4 percent, reaching ₹9,685.36 crore. The company, which has completed 80 years, has improved its market share in the room air-conditioner (RAC) segment, estimated at 13.75 percent compared to 13.50 percent in FY23.

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