Northern Comfort

BLUE STAR'S calibrated strategy of focusing on innovative product lineup and strong marketing campaigns is reaping dividends for the company in Northern India

- By Arjun Yadav

THANKS to the harsh summer last year, FY25 arguably proved to be one of the highest growth years for Blue Star. The company registered over 50 per cent growth in sales of AC units, selling nearly 1.5 million units compared to 1 million units in FY24.

The Indian Room Air Conditioner (RAC) market reached 10 million units in 2024 and is expected to reach 17.5 million units by March 2026, per Blue Star Managing Director B. Thiagarajan. The company now projects sales of 1.75 million units in FY26, translating to 25-30 per cent growth.”

“A 25 per cent growth is a big growth over last year. I don't think overall there should be a concern if it stays around that number,” says Thiagarajan. However, if the summer turns out like last year and the demand indeed surges by 50-60 per cent as we approach May-June, Thiagarajan cautions against an inevitable shortage in the market. He has several reasons for this. One of them is India’s heavy dependence on China for compressor supply. Chinese manufacturers currently meet approximately 65-70 per cent of the required production capacity. The key concern among AC manufacturers is that while market demand is rising, the number of imported components is decreasing, leading to a possible shortage.

“India could achieve self-reliance in compressor manufacturing by 2028, but in the interim, companies must carefully plan their inventory on a quarterly basis,” Thiagarajan advises.

Thiagarajan also raises concerns about the ongoing global trade wars, which have disrupted supply chains, led to retaliatory tariffs, and caused financial market volatility.