Blue Star's air conditioners with in-built air purifiers will be available in the market from April 2020: B Thiagarajan, Managing Director

"We believe nearly 10 per cent of the air conditioner market will migrate towards this integrated air conditioners with in-built air purifiers", says B Thiagarajan, Managing Director, Blue Star Ltd. In an interview with Swati Khandelwal, Zee Business, Mr Thiagarajan, said, "My estimate for the full year for the air conditioning market is that it will grow by around 10% and we will be growing by 15%, and move our market share to 12.75%". Edited Excerpts:

Q: Blue Star has launched its new 5-star inverter room air conditioner (AC) with an in-built air-purifier. Please let us know about its features and the price at which it will be available as well as the locations where it will be accessible?

A: As I had mentioned a few months ago, the standalone air purifier market is very small and its size is of around Rs 200 crore. It is 15-20 days noise after which people forget about this. The main reason is you can't have an air purifier and keep the windows open, so the very first application will be in the homes, bedrooms and offices, which are air-conditioned. Then you can't have an air conditioner on a wall-mounted one and the floor-mounted air purifier. To complete the product features, we have integrated the air purifiers with the air conditioners. So, you got a unique contact microbial technology, which assures anti PM2.5 up to 99.35% efficacy. Same way anti-bacterial and other protection up to 99.99%. So, you just pay Rs 4,000 more for getting this particular product if an air conditioner 5-star inverter is Rs 44,000 then just pay Rs 4,000 more and get an air conditioner with air purifier inbuilt. This is the value proposition.

Q: What will be your strategy on pricing and sales target of the particular product?

A: I anticipate that at least 10% of the air conditioner buyers will move to this particular product. Somebody, who would have just bought an air conditioner will now go in for air conditioner with an in-built air purifier. So, I anticipate that at least 10% of the customers will migrate into this. To enable this with Virat Kohli as the brand ambassador we are also launching a campaign today, where he endorses, 'Owned by Virat and Loved by Virat', which is an air conditioner with unique air purification technology in-built. So, in the coming season, whether it is winter or summer, this product will always be in demand. In addition to this, we are also on field trials with commercial air purification systems meant for offices, colleges, schools and so forth. This particular product will be made available to anyone from April 2020. 

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Q: On the onset of winters in large part of the world, had you factored-in something for heaters?

A: What we have done is that you can operate the purification alone on a fan mode in which you need not consume the power for air conditioners at all. So, you will switch on the air conditioners and switch it on fan mode and the air purification mode will still work. All, you have invested Rs4,000 and you need not sacrifice the floor space at all.

Q: What is your outlook for your company for the remaining part of the financial year and what are your expectations on the front of the order book and price trend?

A: Fortunately, the air conditioner market is doing well and I think there may not be scopes for the price increase but margins will have to be stable. At the same time, I think, we will focus on getting our market share up. My estimate for the full year is that the market will grow by around 10% and we will be growing by 15%, moving our market share to 12.75%, which is the goal. As far as the projects business or the commercial industrial part is concerned, there is a slowdown, while the order book is healthy as we have closed the year on September 30, 2019, with around Rs2,935 crores of orders, which is 32% higher than the previous year. But, the execution speed is not happening. We have focused on controlling the working capital and have brought down the borrowings to Rs189 crore from Rs463 crore for the same period. Therefore, I will be optimistic about the room air conditioner business prospects. As far as the commercial project's business is concerned, I think the growth should be around 10%. We will stay focused on working capital. On the whole, FY20 will be a much better year than FY19. As we prepare for summer, I hope the winters are short and summer is longer, even though people may not like it but I have vested interest in that. For FY21, let's see the government's actions and other things should come back and we will have a much greater year even then Fy20.