Blue Star Trims Output As Summer Sales Fizzle

Blue Star Ltd. has cut production by 20% in May and over 25% in June as a weaker-than-expected summer season dampened air-conditioner demand, Managing Director B Thiagarajan told NDTV Profit.

The company had entered the season expecting over 25% growth, building on last year’s record performance. But unseasonal rainfall in early April and the early onset of the monsoon disrupted sales. “Right from April first week, it was bad news,” Thiagarajan said. He estimated that the market may have shrunk by nearly 25% so far.

Despite the short-term setback, the full financial year is still likely to see 10–15% growth, helped by stronger sales in commercial refrigeration and an expected uptick in the second half of the year, according to the MD. “It is disappointing, but it is not a disaster,” he said, adding that such downcycles tend to hit the industry every few years.

He also pointed to a likely surge in orders ahead of the energy-efficiency label change coming into effect on Dec. 31, 2025. That shift, he said, typically boosts third- and fourth-quarter purchases.

On the inventory front, he acknowledged some build-up but said the company has taken corrective action. “As far as Blue Star is concerned, we’ll get it under control by the end of this month,” he said. The company does not expect to extend production cuts into July.

While costs remain volatile, Blue Star has become more resilient on the supply chain front, having built local sourcing networks and secured alternate vendors for key components, he said. “We are not panicking on that front at all,” he said.

On the government’s proposed plan to introduce a minimum temperature setting for air-conditioners, Thiagarajan said it would have a negligible impact. “It is a minor modification in the controllers — that’s about all.”