Blue Star's Race To 15% Market Share Slow And Steady, Says Thiagarajan

Blue Star Ltd. is moving towards its goal of 15% market share by the financial year 2024–25 in a “slow and steady” manner so that it doesn't baulk at delivering margins, according to Managing Director B. Thiagarajan.

“We should grow faster than the market, we should build scale, and we should deliver profits," he told BQ Prime in an interview. "Market share in itself is not the goal.”

According to Thiagarajan, the company is well poised to raise its market share to 13.75–14% in the current fiscal. The air conditioning major currently holds 13.25% of the current market share.

The rise to 14.5–15% is uncertain because there is likely to be even higher competitive intensity in the coming fiscal with companies targeting incremental sales in accordance with the mandate of the production-linked incentives scheme, Thiagarajan said.

Blue Star is committed to achieving operating profit margins of 8–8.5% in its unitary products or room air conditioner segment in the current fiscal, Thiagarajan said.

The company had raised prices in the first quarter of the current fiscal to offset higher input costs and even contemplated passing on softening input costs in the third quarter. However, the depreciation of the rupee has now put paid to any reduction in prices, he said.

At the end of the September quarter, Blue Star saw its revenue increase by 27% to Rs 1,576.24 crore, against an estimate of Rs 1,412.64 crore. Net profit for the period grew 36% to Rs 42.55 crore, compared with an estimate of Rs 37.95 crore.

The Blue Star share closed marginally higher (0.07%) at Rs 1,222.35, against a 0.36% rise in the Nifty 50 on Friday.