1. Blue Star eyes 30 per cent growth in festive season

Blue Star eyes 30 per cent growth in festive season

Air-conditioner maker Blue Star is looking at a 30 per cent growth this festive season on the back of good monsoon and hike in salaries and pensions of the central government employees following implementation of the Seventh Pay Commission recommendations.

By: | Mumbai | Published: October 4, 2016 6:52 PM
Air-conditioner maker Blue Star is looking at a 30 per cent growth this festive season on the back of good monsoon and hike in salaries and pensions of the central government employees following implementation of the Seventh Pay Commission recommendations. Air-conditioner maker Blue Star is looking at a 30 per cent growth this festive season on the back of good monsoon and hike in salaries and pensions of the central government employees following implementation of the Seventh Pay Commission recommendations.

Air-conditioner maker Blue Star is looking at a 30 per cent growth this festive season on the back of good monsoon and hike in salaries and pensions of the central government employees following implementation of the Seventh Pay Commission recommendations.

“The earliest indications are Onam and Ganapati and it has done well. It is a much larger growth than what we had expected, therefore in Diwali and New Year, it should be going up,” Blue Star Joint MD B Thiagarajan told PTI here.

“My estimation is that 30 per cent growth should be there during this festival season. Last year, during the festival season, it was around 20 per cent,” he added.

The 73-year old company today forayed in the Rs 4,200- crore residential water purifier space and is targeting a market share of 15 per cent in the next three years.

“If we expect to double our revenue by the 75th year, it has to come outside from air conditioning and refrigeration space… When it came to water purifiers, one more factor was also very important to us, that this is a category where the penetration is higher than air conditioning.

“AC penetration is around 5 per cent and water purifier is around 18-20 per cent in the urban markets and the market is growing at a healthy rate of 22 per cent. It fits with our growth pattern. Even though there are four market players (in water purifiers), we have an opportunity there to grab market share and grow,” he said.

The company expects the new business to generate Rs 200 crore by its 75th year, Thiagarajan said.

At present, the Rs 3,800-crore company has outsourced manufacturing of water purifiers in the country and South Korea but it plans to make them at its upcoming Jammu facility in the next two years.

“Our Jammu plant will be commissioned by September 2017 and we have set aside space to manufacture this particular product,” Thiagarajan said.

Blue Star has launched 13 models in four segments, which are priced between Rs 14,900 to Rs 44,900 and the products will be initially available in Mumbai, Delhi, NCR, Bengaluru, Secunderabad, Chennai, Pune, Ahmedabad, Nagpur and Chandigarh.

Over the next few weeks, the distribution will be ramped up in all states in South, Maharashtra, Gujarat and a few tier II and III markets in the North. The company aims to roll out the products across the country by next year and also plans to enter the commercial water purifier space next year.

Thiagarajan said the company could look at increasing the water purifier models to 40 next year and 100 models in the near future. “It depends on what speed we scale up. The water quality is changing and it is probable that you need to have different models for the e-commerce channels as well in order to avoid channel conflict,” Thiagarajan said.

The company would look to introduce products at a lower price point, he said.

Blue Star will invest Rs 25 crore on advertising the water purifiers this fiscal, with 10 per cent spend earmarked for digital medium.

“We are focusing on television primarily, outdoor in select cities, followed by digital. We are betting big on digital and we are also getting into activation.

“We have tied up with IndiGo, so in 10 days from now, all water that they serve will be in Blue Star branded glasses,” Blue Star Water Purifiers Division Chief Marketing Officer Girish Hingorani said.

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