Employees work on the outdoor units of split system air conditioners in Neemrana, Rajasthan, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

Blue Star Anticipates Margin Hit On Delayed Price Hike

Blue Star Ltd. expects to a hit on margin in the first quarter due to a delay in increasing the price of air conditioners.

“Since there is an excess inventory of two to three months, the price hike may be shifted to August,” Managing Director B Thiagarajan told BloombergQuint.

The company’s operational margin in the fourth quarter was 6.3 percent, up from 5.4 percent sequentially. The manufacturer of air conditioners and refrigerators also does not expect the first quarter performance to be as good as the previous one as monsoon hits most parts of the country.

Thiagarajan, however, expects the room air-conditioner market to grow 10 percent by the end of the year, as penetration of the industry is relatively low in India and there are many first-time buyers.

Also Read: Blue Star Expects To Outperform Industry Growth

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