Kolkata, April 9 Blue Star Limited, a major player in air-conditioning and commercial refrigeration, expects around 20 per cent growth in sales volume and about 25 per cent revenue growth this year, its managing director B Thiagarajan said on Thursday.
He said the air-conditioning industry is currently facing a total cost impact of around 13 per cent, comprising 5 per cent from revised energy labelling norms and about 8 per cent due to higher raw material prices.
"Of this, the industry has already passed on about 5-6 per cent to consumers, and another 5-7 per cent increase is expected in April to offset the remaining impact," Girish Hingorani, Vice President (Marketing - Unitary Cooling Products), said.
Thiagarajan added that margins, which typically stand at around 8.5 per cent for the business, have been squeezed recently due to cost pressures, with the company focused on increasing sales.
According to Thiagarajan, if the planned price hikes are fully implemented and supported by strong summer demand, margins could recover and potentially deliver improved outcomes, though he refrained from giving specific guidance as the company is in a silent period ahead of results.
"Two things are not within our control: the onset of summer and the global war situation. The weather and geopolitics will determine how the season ultimately plays out," Thiagarajan said.
Regarding demand, Thiagarajan described the current season as a "delayed summer," with the heat picking up only towards mid-April instead of mid-March in several parts of the country.
Despite the delay, the company remains optimistic about the room air-conditioner market, which he said has evolved into a necessity-driven category with strong long-term potential.
Hingorani said the company was planning to increase the number of stores to 13,000 from 11,000 now to help improve market share to 15 per cent in FY26 from 14.3 per cent now.
Household penetration remains around 10 per cent or roughly 35 million homes, leaving significant headroom to expand to nearly 150 million households earning between Rs 3 lakh and Rs 10 lakh annually, Hingorani said.
Beyond residential cooling, Thiagarajan highlighted the rapid growth of data centre cooling, an engineering, procurement and construction (EPC) segment for the company. The industry is currently valued at around Rs 4,000 crore, with Blue Star commanding over 30 per cent market share, translating to roughly Rs 1,500 crore.
He said the segment is expected to expand to about Rs 10,000 crore within a year, while nearly Rs 35,000 crore worth of data centre projects could be finalised over the next five years.
To meet evolving efficiency norms, the company invests about 1.5 per cent of revenue in research and development, amounting to nearly Rs 300 crore annually, and has launched 125 new models, including products under the Iconia series.
Thiagarajan cautioned that geopolitical tensions could pose risks to costs later in the year. While the company has secured its current raw material inventory, increases in oil derivatives such as plastics and higher freight rates could affect margins during the festive season.
Exports of room air-conditioners also remain limited as India's production scale is far smaller than China's, which manufactures nearly 180 million units annually compared with India's roughly 15 million units, making exports of room air-conditioners difficult, he added.