Uncertainty about the future due to Coronavirus and a drop in disposable income are expected to hit the consumer durables segment. Like other players, Mumbai-headquartered Blue Star has also revised its growth prediction — from 15-20% to 10-15% for FY 2020.
Speaking to The Free Press Journal, B Thiagarajan, Managing Director, Blue Star, said, “We thought the growth would be around 15-20% but now there will be a drop by 10-15%.” Blue Star is not the only player to revise its growth projection.
In the last week of February, Blue Star had also increased the price of its products by 3-5%. The price hike was mainly due to an increase in customs duty on components for motors and compressors; an increase in ocean freight due to drop in a number of valid vessels, and airlifting of (consumer durable)components because of the CoronaVirus. “At this point in time, the market will not accept the price rise. So, that will hurt the demand further,” added Thiagarajan.
Despite lower demand, Thiagarajan claimed that the company will witness some shortage between April 15 and 30th. “My company will run out of the material between April 15 and 30th. But since the demand will also come down, I am not so worried.”
Thiagarajan stated that in some places Chinese manufacturers have resumed production. “The attendance in one of the factories in China has reached 100%."
The company enjoys 12.5% market share and is expecting to close this financial year with 12.75%. “In FY21 our target is 13% market share and in FY24 we are targeting 15%," he said.
