Blue Star to invest ₹400 crore in capacity expansion, eyes 20% growth in FY'26

Leading air conditioning solutions company Blue Star Ltd will invest ₹400 crore in FY'26 to expand its manufacturing capacity across room air conditioners, commercial refrigeration and commercial air conditioning segments, a top company official said on Thursday.

Of the total capex, ₹200 crore will be allocated to the third phase of its Sri City plant to increase room air conditioner capacity by 12 lakh units from the current 8.5 lakh units.

The company will invest ₹53 crore in its commercial freezers unit near Mumbai and ₹150 crore in commercial air conditioners at its Himachal Pradesh plant.

"We are aiming at 20% growth in FY'26. We estimate to end the current fiscal with 25% growth backed by robust growth seen in the room air-conditioner business. Room air conditioners business is expected to grow 30% in Q1 FY26 against around 50% growth in FY25," Managing Director B Thiagarajan said.

Last year, the industry registered unprecedented growth in room air conditioners due to severe heat waves and extended summer.

The company expects to raise its market share in key segments driven by innovation, quick delivery, and growth in quick commerce and QSR segments.

In-room AC market share is expected to expand from 13.75% to 13.8% by the end of this fiscal and 14.25% in FY26.

In the commercial refrigeration segment, the company is eyeing a rise in market share from 30% to 33%.

The company announced plans to launch a broad portfolio of commercial refrigeration products in Kolkata designed for sectors including horticulture, dairy, ice cream, poultry, processed foods, quick service restaurants, HoReCa, marine, pharmaceutical, and healthcare.

Blue Star's addressable market in commercial refrigeration is around ₹5,000 crore out of the total ₹8,000 crore market, excluding ammonia-based cooling systems where the company is not present.

Thiagarajan said the company is evaluating capex for manufacturing in the Eastern region, where its room AC market share has grown to 13% from 10% and commercial refrigeration share to 8-10% from 7-8%.

Blue Star's revenue rose 25.3% to ₹2,807.36 crore in Q3 FY25 compared to the year-ago period.