Blue Star Projects Strong Volume Growth, Plans Sri City Factory Expansion.

Blue Star, a leading air conditioning and commercial refrigeration company, anticipates record-breaking sales volumes of 1.5 million units by the end of the current fiscal, up from 1 million units in FY24. To support this growth, the company plans a ₹200 crore capital expenditure in FY26, focusing on capacity expansion at its Sri City factory, along with investments in R&D, digitalisation, and marketing.

Despite market challenges, Blue Star reported around 35% growth in Q2 and Q3. “As we enter Q4, the market remains strong, making this an unprecedented year for the air conditioner industry. With a promising summer ahead, the room AC market is expected to grow by 20-25%,” said B Thiagarajan, Managing Director, Blue Star Ltd, at the launch of the company’s new range of room ACs.

Capacity Expansion and Market Share Goals

Last summer, Blue Star’s market share dipped slightly from 13.75% to 13.5% due to supply constraints.

However, the company recovered in Q2 and Q3 and expects further gains in Q4, aiming for a 13.8% market share by fiscal year-end and 14.25% in FY26. While its original 15% market share target has been pushed to FY27, Blue Star remains committed to steady growth.

The company’s ₹200 crore capital investment this year will boost production capacity. The Sri City facility, currently operating at full capacity (650,000 units), will expand to 825,000 units next year and 1.2 million units by FY27. Meanwhile, its Himachal plant has reached its maximum capacity of 650,000 units.

Focus on R&D, Digitalisation, and Branding

Blue Star has earmarked ₹32 crore for R&D this year, with plans to increase it to ₹51 crore next year. Additionally, the company’s Chairman Emeritus has contributed ₹100 crore, to be fully utilised within three years. To strengthen digitalisation and technology integration, Blue Star has allocated ₹20 crore.

On the branding front, Virat Kohli continues as brand ambassador. Advertising expenses will increase from ₹50 crore last year to ₹65 crore this year, with ₹40–45 crore dedicated to summer promotions alone.

Smart AC Innovation and Growth Strategy

For the upcoming summer, Blue Star has introduced a new lineup of 3-star and 5-star air conditioners, designed for high cooling efficiency under extreme conditions. These models, ranging from 0.8 TR to 4 TR, start at ₹28,990.

Inverter AC models launched in the last three years are smart-ready, allowing customers to upgrade by installing a ₹3,000 smart module. Those opting for a Wi-Fi-enabled AC upfront pay just ₹990 more than a regular AC.

“This pricing strategy has driven rapid adoption. From 2,000 smart AC units sold two years ago, sales jumped to 85,000–90,000 units last year. With smart features now standard across 40 models, we aim to sell 5 lakh units this year,” said C Haridas, Executive VP, Sales & Marketing, Blue Star.

With robust growth, capacity expansion, and aggressive marketing, Blue Star is poised for strong performance in the air conditioning industry, particularly as demand surges in the upcoming summer season.

HBL