Vaccination program could generate a revenue of around Rs 200 crore: B Thiagarajan, MD
B Thiagarajan, Managing Director, Blue Star Ltd, talks about his outlook for 2021, demand, order book, vaccination program, expansion plans and Atmanirbhar Bharat among others during an exclusive interview with Swati Khandelwal, Zee Business.
B Thiagarajan, Managing Director, Blue Star Ltd, talks about his outlook for 2021, demand, order book, vaccination program, expansion plans and Atmanirbhar Bharat among others during an exclusive interview with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: Do you think that that 2021 is going to be a good year for you based on the strong recovery and demand that we have seen in the last few months?
A: From the festival season onwards, we are seeing a great recovery and demand is good. I think, Q3 has already crossed around 100% of the last year’s level. If things go on well then, we should be growing by 10%, at least that of the 110% of the last year’s level, this is for the room air conditioners and commercial refrigeration products. We have increased the prices due to the commodity prices are going up and you know the details of that. Therefore, 4-5% price increase has been taken and I think even then the demand will continue going by the consumer sentiments. There are quite a few products that are doing well as you are aware, we made the product more affordable in order to penetrate much more in the bottom of the belly of the market, the first-time buyer, tier III, IV and V markets, so those products are doing extremely well. We are making the brand relevant and that is why Virat Kohli was engaged as the brand ambassador. There will be a campaign again coming from February last week and I look forward to a very great summer season. There are also value-added products that are doing well like the virus deactivation features that we had introduced. And the most important thing is the vaccination program-related demand for commercial refrigeration products, we have the entire range whether it is deep freezers, Iceland refrigerators or freezers for -80 degree. If the Pfizer vaccine is approved, the entire range is there and those orders are flowing in. On the whole, I have mentioned that it was a great festival season and the demand will continue and 2021 should be a very great year.
Q: There is an incremental opportunity as you have talked about the vaccine for which you are preparing and getting its orders. So, tell us about the size of the market and the revenue you can garner from it next year? What are the targets that you have fixed and are you seeing growth only in refrigeration business?
A: In refrigeration, if you recall the first half till September the restaurants, hotel and other banquets were not open therefore the deep freezer or the cold rooms related to ice cream, the frozen food was very low but from September onwards we are witnessing huge growth in that segment as well. And vaccination, specifically you asked, I think the vaccination program alone should be giving us close around Rs 175 to 200 crores over a six-month period. And, what we are waiting and watch is whether the private sector will be allowed to participate in the vaccination program, in this case, will be an additional opportunity. These are for cold rooms, walking coolers, Ice land refrigerators and -80-degree deep freezers. So that can boost further the demand but as of now, I foresee close to around Rs 200 crore of revenue from vaccinations related efforts alone.
Q: What kind of order book do you have at present and which kind of incremental order book is visible in 2021 in terms of the size? Also, tell us about the capacity expansion plans in the context of the incremental order book that is expected?
A: The order book inflow has been good; it is much better than what we anticipated. The pending order book, as of now, is close to Rs 3,000 crore almost the same level as it was before COVID pandemic. As far as capacity expansion is concerned, the very first one will be commissioned by July or August is a deep-freezer plant, which is coming up in Wada that is to cater to commercial refrigeration product segment. Then we will be participating in the production linked incentive scheme of the government of India for room air conditioners and some of the components thereof under the Atmanirbhar Bharat mission. So, this plant will be at Sri City and we have procured the land and the project was on hold, we will initiate that project and it should get commissioned by early 2022 that is our target. Besides, we are also expanding our current manufacturing facility at Himachal Pradesh that is to localize some of the products which we were importing earlier.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.