Blue Star eyes 10,000 cr revenue mark by next year

ANDHRA PRADESH: Air conditioning major Blue Star is looking to close the current fiscal at Rs 8,000 crore plus revenue as it eyes the Rs 10,000 crore milestone by next year.

The company commenced its commercial production in its smart plant located here on 26.5 acres from January 1, this year. Of the Rs 550 crore proposed investment, it has pumped in Rs 350 crore to manufacture 3 lakh units in its first year and gradually scale up production to 1.2 million units.

B Thiagarajan, MD, Blue Star, said the company has acquired another 40 acres of land in the vicinity of the plant to essentially cater to export needs and production of commercial products.

“This factory (Sri City) is important as our efforts were to commission it by December 2022 before going for commercial production from January. We are confident of producing 25,000 units a month in the first phase and look at one lakh units subsequently,” he told the media here on Monday.

As of now, the company operates two shifts with each one producing 600 units. By the month end, each shift will produce 900 units.

Noting that the trial production began in October 2022, Thiagarajan said south India ensured a conducive ecosystem in terms of talent availability and local administration, among other things. This factory embedded with a reasonable amount of automation, would emerge as an important hub for Blue Star. By FY 23-24, the company’s strategy is to achieve a production of eight lakh units, of which its facility in Himachal Pradesh would contribute six lakh units. The new unit is also a part of its de-risking strategy, as it sees itself as a volume player in a market estimated to be 10 million units in size.

Blue Star is expecting the efficient logistics management to result in 20 per cent productivity gain. Barring the compressor, most of the components required to manufacture the indoor AC units would get manufactured in the Sri City facility. The indigenisation of the capital-intensive compressors would mean achieving a scale of 2 million units.

Thiagarajan anticipates the capacity expansion to get completed by FY27 with south (now contributing 50 per cent) continuing to drive the sales trajectory. Shashi Arora, president-COO, was also present on the occasion.