Blue Star Plans 4-5% AC Price Hike in April

Blue Star is set to increase air conditioner prices by 4-5% in April due to the rising costs of metals such as steel and copper, as well as fluctuations in the Indian rupee. The company had previously raised prices by 3-4% in February to manage escalating input costs.

According to Managing Director B Thiagarajan, financial market volatility strengthens commodities, leading to increased metal prices. Additionally, currency exchange rate fluctuations are impacting costs, necessitating the price hike.

Compressor Supply and Self-Sufficiency Goals

Thiagarajan also highlighted that the AC industry is currently facing a shortage of compressors. However, he expressed optimism that, with the support of the Production-Linked Incentive (PLI) scheme, India will achieve self-sufficiency in compressor manufacturing by 2028.

Investment in Production Expansion

Blue Star is investing approximately Rs 200 crore to enhance production capacity at its Sri City plant. The company operates three manufacturing facilities—two in Himachal Pradesh and one in Andhra Pradesh. The Himachal Pradesh plants are currently running at full capacity.

The company aims to increase its total production capacity to 1.4 million units in the current fiscal year. By FY27, this is projected to reach 1.8 million units, with 6.5 million units produced at the Himachal Pradesh plants and the remaining at Sri City.

Strong Sales Growth Expected

Despite a high sales base from the previous year, when the market saw nearly 60% growth, Blue Star anticipates a 25-30% increase in AC sales during the upcoming summer season. The company expects its market share to rise from 13.9% in FY25 to 14.3% in FY26.

Research & Development Investments

Blue Star has announced an investment of approximately Rs 35 crore towards research and development to improve product innovation and efficiency. This move aligns with the company’s long-term goal of staying ahead in the competitive AC market.

Launch of New Models and Smart ACs

On Thursday, Blue Star unveiled 150 new models of room air conditioners, including a premium flagship range for the upcoming season. The company has also worked on narrowing the price gap between its standard and smart ACs to around Rs 1,000.

Blue Star plans to sell approximately 500,000 smart ACs this year, a significant increase from 70,000 units sold last year. These smart ACs come equipped with advanced features such as voice command technology and defrost clean technology. Notably, all of the company’s five-star-rated ACs will include smart technology by default.

Future Growth Prospects

Thiagarajan emphasized that India is poised to become the largest AC market in the world by 2035. As demand continues to rise, Blue Star aims to solidify its position by expanding production, enhancing technology, and increasing market share.

Conclusion

Blue Star’s decision to increase AC prices by 4-5% in April is a strategic move to offset rising input costs driven by increasing metal prices and currency fluctuations. Despite these challenges, the company remains optimistic about the growing demand for air conditioners in India, expecting a 25-30% sales growth this summer.

With significant investments in expanding production capacity and research & development, Blue Star aims to strengthen its market presence and enhance its smart AC portfolio. The company’s commitment to innovation, sustainability, and customer-centric solutions positions it well to capitalize on the booming Indian AC market. As India moves toward self-sufficiency in compressor manufacturing, Blue Star’s long-term vision aligns with the industry’s growth trajectory, reinforcing its role as a key player in the evolving air conditioning sector.