Price hikes to be passed on as demand picks up with onset of summer: Blue Star CEO

Air-conditioner makers are set to roll out further price increases as demand gathers momentum with the onset of summer, according to B Thiagarajan, Managing Director of Blue Star Ltd.

“While some price hikes have already been implemented, the remaining will be passed on as demand picks up,” said Thiagarajan while speaking to the media after the launch of new summer products in Delhi.

He said that while a part of the recent cost increases has already been passed on to consumers, additional hikes will be implemented as demand strengthens during the peak summer season. “A large part of the price increase has already been passed on. The rest will follow as the summer picks up,” he noted, indicating a staggered approach to pricing in line with demand conditions.

The industry is grappling with multiple cost pressures, which are expected to translate into higher retail prices. A key factor is the transition to more stringent energy efficiency norms, pushing manufacturers to upgrade products from lower star ratings to higher ones. This shift alone is likely to result in a price increase of around 3-8%, with an average impact of about 5%.

In addition, rising input costs, particularly copper, along with currency depreciation, are adding to the burden on manufacturers. These factors, combined with higher logistics and component costs, are expected to cumulatively drive a significant increase in air-conditioner prices.

Thiagarajan also highlighted the impact of global geopolitical developments on raw material costs. “Due to the ongoing geopolitical situation, the cost of petroleum-based inputs such as plastics is rising.” However, companies are choosing to pass on these costs gradually rather than in one go, to avoid dampening demand during the crucial summer sales period.

Launches new range of room air conditioners

Blue Star on Tuesday launched an expansive new range of room air conditioners for the 2026 summer season, aiming to capitalise on the strong structural growth in India’s cooling market. The company’s latest portfolio comprises 125 models, including inverter, fixed-speed, and window ACs, catering to a wide spectrum of consumer needs. All models are compliant with the latest BEE standards.

A key highlight of the launch is the premium ‘Iconia’ range, designed to appeal to higher-end consumers. The lineup also includes specialised offerings such as super energy-efficient ACs, heavy-duty models capable of operating in extreme temperatures of up to 56°C, hot-and-cold ACs for year-round use, and units equipped with anti-virus technology to enhance indoor air quality.

The company is also betting on technology-led differentiation, with nearly 50 models featuring smart Wi-Fi capabilities, AI-driven cooling, voice command features, and advanced filtration systems. Its super energy-efficient models deliver an ISEER of up to 6.25, making them significantly more efficient than conventional 3-star inverter ACs.

As per the company, it is also scaling up its manufacturing capacity to support growing demand, with current production at around 1.4 million units, expandable to 1.8 million units. The company operates a modern manufacturing facility in Sri City, Andhra Pradesh, along with two plants in Himachal Pradesh, all equipped with automation and IoT-enabled systems.

AC market projected to grow to nearly 30 mn units by FY30

According to the company, the broader industry outlook remains robust. India’s room AC market is projected to grow from around 14 million units currently to nearly 30 million units by FY30, driven by rising incomes, urbanisation, and increasing climate intensity. Lower penetration levels in Tier 3, 4, and 5 markets are expected to fuel the next phase of growth, alongside replacement demand in urban centres.

Blue Star is also expanding its reach, with a presence across 900 towns and over 10,000 retail outlets, supported by a strong after-sales network of more than 2,100 service partners. Beyond residential cooling, the company continues to strengthen its commercial refrigeration portfolio, catering to sectors such as food retail, healthcare, and cold chain logistics.

Looking ahead, Thiagarajan remains optimistic about long-term demand. “India’s cooling demand is at an inflection point, with nearly 150 million households expected to be able to afford air conditioners in the future,” he said, adding that the company is well positioned to capitalise on both residential and commercial opportunities.