“I have not seen two consecutive failed summer seasons in my nearly five decades in the industry,” he said in a media interaction in Chennai.
Thiagarajan pointed out that FY2025-2026 began with a failed summer and the GST reduction was announced on 15 August and there were virtually no sales till 22 September, with inventory levels going up.
There was a change in energy label regulation in January 2026 and also unprecedented increase in commodity prices, he added.
Thiagarajan also pointed out that price of air conditioners would have gone up by at least 13-15 per cent, amid increase in copper prices, a key material.
We have taken the price hike in a phased manner — partly in the fourth quarter and partly in the next quarter. About 8 per cent hike has already happened and another 7 per cent or so will happen in the next financial year, he said.
“Right now, people are not feeling the price hike because dealers buy in large numbers and stock up whenever there is going to be a price revision. But all these stocks will get exhausted in the peak summer. I think the real impact will be felt from the first week of May onwards when consumers will feel the pinch,” Thiagarajan said.
For instance, a price of 3 star air conditioner will increase to Rs 45,000 from Rs 32,000, he said.
“Between 2023 and 2025 the dollar was stable, but now the exchange rate is volatile. if petrol prices go up, transportation costs will increase, which is about 4 per cent of the total cost. Around 8.5 per cent of the material cost accounts for the commodity price increase alone. I don’t think the industry will be able to absorb any of this because it is already not a highly profitable industry,” Thiagarajan said.
He said the company expects 30 per cent growth in terms of value and 25 per cent in terms of volume for financial year 2026-2027, when compared to previous year.
However, Thiagarajan said the targets will depend on how the summer climatic conditions will be the impact from how long the Middle East war prolongs and the consumer sentiment.
On the impact from the natural gas supply disruptions due the Middle East conflict, je explained that two inputs liquefied natural gas (LNG) and piped natural gas (PNG) are used in powder coating and brazing lines.
“While we have all received the notification that there will be a 50 per cent cut in supplies, we are not huge consumers. It has not stopped production yet, and one hopes it will not interrupt operations in any manner. But we have been warned that there may be disruption. The government has constituted a committee to look into it. I think alternative supplies are being arranged,” Thiagarajan said.
Blue Star expects to be Rs 20,000 crore company by 2030 and 15 per cent or around Rs 3,000 crore to come from exports, he said.
The company has earmarked Rs 70 crore each on investments towards research and development, marketing and manufacturing facilities in 2026-2027 and hopes to increase its market share to 14.5-14.75 per cent from current 14.2-14.3 per cent, Thiagarajan said.
To support the growth of its Room Air Conditioners business, Blue Star has strengthened its manufacturing footprint across multiple facilities. The Company’s current production capacity is approximately 1.4 million units, scalable to 1.8 million units to meet rising demand. Blue Star operates a state-of-the-art plant at Sri City, Andhra Pradesh, along with two plants in Himachal Pradesh, all dedicated to room AC production.
Blue Star also launched its new range of Room Air Conditioners for Summer 2026.
