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Nandana James A maelstrom of market forces in play at the global level — such as trade wars, currency fluctuations, spiralling oil prices and commodity prices — have subjected Indian companies to a lot of uphealals in the second quarter of FY18, according to Suneel M Advani, Chairman of Blue Star Ltd.
“The comparison with last year is not really appropriate because last year, there were a lot of factors like demonetisation and GST (rollout) at play. It was an unusual year. This year, the major event that happened, in Q1 actually, was that the summer wasn’t really conducive to the sales of air-conditioning. This continued into Q2,” he said. While Q2 wasn’t a great quarter, it was “reasonably okay”, he added.
The festival season sales, which started in September with Onam, suffered a blow because of the Kerala floods, with the impact percolating to the neighbouring States, too, said B Thiagarajan, Joint Managing Director at Blue Star. “However, since counter sales continue to be healthy, and the consumer spending story continues, the expectation is to at least hold on to last year’s level of sales,” he explained.
The automobile industry tends to make an impact on the consumer durable industry, he added. If the former does well, the latter follows suit. “The rest of the 40 per cent sale depends on consumer finance schemes. The prices are likely to go up by January-February. Therefore, it is likely that consumers will buy now, as the price levels are very attractive because, post summer, the industry is carrying inventory,” said Thiagarajan.
Commercial refrigerators, mechanical projects and B2B businesses will compensate, to some extent, any fall in the sales of room ACs, he added.
Mostly made in India
The company has been focussing on indigenisation for the past eight years. “Among the Indian manufacturers, we have probably the highest level of indigenisation, and every year we are increasing it,” said Advani. He added that while rival brands still resort to importing ACs and putting their labels on them, Blue Star manufactures almost 75-85 of the units here.
The company, which celebrated its 75th anniversary last month at the BSE, plans to launch platinum jubilee special edition products in the room AC and water purifier categories on October 6 in a limited manner. An entire range of new products will be launched in early 2019, said Thiagarajan.
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