Blue Star Is Recovering From A Weak Summer, Says B Thiagarajan

Air conditioner maker Blue Star Ltd. is recovering from a weak summer.

Volumes and revenue recovered in the ongoing quarter ending September, Joint Managing Director B Thiagarajan told BloombergQuint. “Consumer spending continues to be promising.”

Blue Star has an 11 percent share in India’s room air-conditioning market, the largest after No. 1 Voltas Ltd., according to Motilal Oswal. The company’s operational profitability was better than peers in the first quarter ended June, a BloombergQuint analysis showed.

While early onset of rainfall may have led to lower sales of air conditioners, it will increase the purchasing power of people in smaller towns, Thiagarajan said. “Penetration in India is less than 5 percent and it is bound to grow,” he said. “It’s the right time for this (air conditioner) segment to grow.”

The company’s growth, according to Thiagarajan, will also be aided by an increase in industrial sector demand, seasonal sale of water purifiers and the upcoming festive season. Even though Onam, the start of the festive season in India, will be subdued in Kerala due to the flood, the overall sentiment is expected to be good on rising consumer spending, he said.