Despite a visible slowdown in demand from the IT sector, air conditioning major Blue Star is confident of maintaining its growth rate.
Banks on newer segments like hotels, hospitals, metro trains
MUMBAI: Despite a visible slowdown in demand from the IT sector, air conditioning major Blue Star is confident of maintaining its growth rate, thanks to opening of newer segments like hotels, hospitals and so on, a senior company official has said.
The company is also looking at improving its operating margins by one percentage point each year on the back of economies of scale, richer product mix and lower
tax rates on account of production in a tax-friendly region.
“We are noticing a slowdown in the IT-ITES segment. The small and medium players are clearly not as bullish as before, though the big players are yet to cut down on their plans. However, this slowdown will be more than offset by opening of new sectors like hotels, hospitals, metro trains, etc. These are our new growth engines,” B Thiagarajan, executive vice-president, said.
“The air conditioning market is expected to be cumulatively worth Rs 40,000 crore in five years. Currently it is about Rs 3,500 crore per annum. Hence we see the market doubling in five years. We have also entered into MEP (mechanical, electrical, and plumbing),” Thiagarajan said.
In a typical MEP project, the value of HVAC (heating, ventilation, and air conditioning ) part is about half the project cost, and till the
acquisition of Bangalore-based Nasser Electricals, Blue Star was present only in that segment.
Now it bids for the electrical (40% of project cost) and plumbing part of as well, thereby increasing the order size.“Currently, 10-15% of the projects are bundled and we expect that by 2010, about 30% of the projects will be
bundled. We will bid for bundled as well as standalone HVAC projects,” Thiagarajan said.
Thiagarajan said though the cold chain business was growing at over 30% annually and someday would rival the air conditioning market, it was still constrained by lack of an integrated approach.
g_rabin@dnaindia.net
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}