Air conditioner prices likely to go up 5-7% as raw material gets costlier

Photo: Shutterstock
Air conditioner prices are expected to rise by 5-7 per cent in July-September due to growing raw material prices and the possible implementation of the Goods and Services Tax, said an industry expert on Wednesday.

"Raw material prices like copper, aluminium and steel have been steadily rising for the last few quarters. The proposed GST bracket for us would be 28 per cent, which is disappointing for the industry. All these could lead to a price hike by up to 5-7 per cent in July-September," said Blue Star Ltd Joint Managing Director B Thiagarajan.

Talking about sales growth projections in the next financial year starting from April, he said the company should clock a 15-20 per cent rise in revenue from the room air conditioners segment in 2017-18.

"The air conditioner industry grew by 20 per cent in October-December despite the demonetisation impact, so there is no reason to believe that growth in the summer season and thereafter would not be in double digits," he said at the launch of new inverter split air conditioner range.

Thiagarajan also said the company would invest about Rs 3.5 billion over the next three years on two new manufacturing units in Jammu and Kashmir and Andhra Pradesh.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel