Blue Star, a manufacturer of air conditioners, anticipates continued high demand over the approaching festival season.
It is anticipated that even during the holiday season, there would be a significant demand for cooling devices. But we’ll have to wait and see,” Blue Star’s managing director, B Thiagarajan, stated to Business Standard.
According to him, the company’s demand for commercial air conditioning equipment is still high even though demand for room air conditioners has decreased from its peak as the weather has dropped.
Blue Star’s revenue increased by 9.5% to Rs 1,038.99 core in the April-June quarter from electro-mechanical projects, commercial air conditioning systems, services, and overseas operations.
“The company experienced robust bookings from segments such as factories and data centres, primarily driven by ongoing efforts of the government to encourage manufacturing investments through PLI initiatives,” Blue Star stated in its results release, “despite limited traction in the commercial building sector.”
Enquiries from the retail and healthcare industries also increased. During the quarter, revenue growth in the commercial air conditioning industry was driven by increased demand from the manufacturing, education, and retail industries. Significant orders for ducted systems and VRF systems were placed from Tier 3 and Tier 4 cities, demonstrating the continued strength of their demand.
While demand for the category was driven by exceptionally high temperatures, its unitary products—which include room air conditioners and commercial refrigeration products—saw a 44.3% increase in revenue growth to Rs 1,729.52 crore in the quarter that ended in June.
After summer, there is always a decline in demand for cooling equipment like freezers and air conditioners. At now, seventy-five percent of the company’s production capacity is being utilised.
According to Thiagarajan, the major air conditioner manufacturer has also proposed a capacity expansion of about Rs 450 crore for the current fiscal year.
The company announced that it will use the Rs 1,000 crore it raised in September of last year through qualified institutional placement (QIP) to expand its capacity over the following five years.
The company hopes to keep its margins at the levels it attained in the first quarter, but there are a lot of other variables at work because of geopolitical concerns that affect the price of commodities.
“Margins are better now than they were a year ago. In the future, it will be reliant on the extremely unstable global commodity prices. Thiagarajan stated, “We will have to wait and watch what happens to commodities prices.
He clarified that because shipping and container costs are currently so high, they would always be difficult to handle.