- Blue Star to implement at least 8% more price hikes this fiscal year
- Current price increase is 5-8% of planned 13% hike due to rising costs
- Price hikes planned in two stages: 5% by June, 3% before festive season
Blue Star will need to pass on at least 8% more in price increases through the remainder of the fiscal year, according to Managing Director B. Thiagarajan, as he cautioned that consumers may not absorb further hikes amid a challenging macro environment.
Speaking to NDTV Profit, Thiagarajan said Blue Star has so far effected 5-8% of the planned 13% price increase and the remainder is unavoidable given the evolving global landscape.
"Five percent more minimum is required in order to protect the margins at last year's level," he said, citing rising input costs from copper, petroleum-linked components such as plastics, and a depreciating rupee.
The increases, though, will not be front-loaded, as Thiagarajan outlined a two-stage plan. Five percent of the hike will be passed on by end of May and into June, with an additional 3% required before the festive season.
"Additional three more percent minimum will be required for the festive season. Every month or every week you have got additional challenges that are coming up in terms of input raw material as well as the exchange rate," he said.
Primary Sales Disappoint
Summer season primary sales have come in below expectations, Thiagarajan said, partly because dealers had pre-loaded inventory ahead of anticipated energy efficiency rating changes and price increases.
With secondary movement now improving, fresh primary orders have begun but not at the pace the industry had hoped for.
"It is not very bad, but it is not an easy walk at all," he said.
He also flagged demand destruction as a real risk if further hikes are passed on. "Consumers are going to tighten their spends and they are not going to be affording this kind of increase once again," Thiagarajan said.
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