Whirlpool India Ltd “Makers of World Class Home Appliances”

Whirlpool India Ltd headquartered in Gurgaon, is engaged in the business of manufacturing and marketing of major home appliances. The company has 3 manufacturing facilities located at Faridabad, Pondicherry and Pune. The company’s product portfolio includes refrigerators, washing machines, air conditioners, microwave, water purifiers, induction cooktops etc.

Whirlpool is one of the Top 500 Stocks, identified by Dynamic Levels Research based on technical and fundamental research.

Whirlpool India share price has touched a 52 week high of Rs. 988 on 29-Aug-2016 and a 52 week low of Rs. 555.55  on 12 -Feb -2016, and is currently trading at Rs. 960

Share Holding

The promoters holding in the company stood at 75% while Institutions and Non-Institutions hold 14.53% and 10.47% respectively.

Financial Analysis

Quarterly Results

• During the quarter ended 31st March 2016, the total income from operations of Whirlpool reported a growth of 11% on Y-o-Y basis and stood at Rs. 860.22 crore against Rs. 775.56 crore in the same quarter last year.
• The operating profit of Whirlpool for the quarter ended 31st March 2016 stood at Rs. 84.65 crore against Rs. 62.19 crore in the quarter ended 31st March 2015, growing by 36%.
• PAT grew by 23% and stood at Rs. 67.81 crore for the quarter ended 31st March 2016 against Rs. 55.27 crore in the quarter ended 31st March 2015.
• EPS grew by 22% and stood at Rs. 5.34 for Q4FY16 against Rs. 4.36 in the same period last year.

Annual Result Analysis: 

• The net sales of Whirlpool for FY16  stood at Rs. 3338.35 crore  compared to Rs. 3167.42 crore in FY15, growing by 5.40%. 
• The operating profit grew by 19% and stood at Rs. 312.33 crore in FY16 against Rs. 263.16 crore in FY15. 
• PAT stood at Rs. 247.38 crore in FY16 against Rs. 210.51 crore in FY15. PAT for the year grew by 17.51%. 
• EPS grew by 18% and stood at Rs. 19.54 for FY16 against Rs. 16.59 for FY15.

Investment Rationale

• Whirlpool’s products are exported to more than 30 markets all over the globe.
• The company has an established position in the refrigerator and washing machine segment with a market share of almost 17% and 13% respectively. In FY15 refrigerator segment contributed ~60% of the company’s total revenues while washing machine sales contributed ~20% of the total revenues.
• Whirlpool is amongst the Top 5 refrigerators manufacturers in India.
• The company has launched new products and expects revenues to pick up post monsoon which is expected to be above normal in FY17.
• The company has set a target of doubling its sales volume by 2020.
• Whirlpool has a diversified product portfolio and is focused on identifying product gaps with its competitors LG and Samsung and expects to fix up the gaps in next twelve months.
• Whirlpool has plans to invest Rs 15-20 crore to set up 100 exclusive showrooms for its built-in-kitchen segment with an expectation of a five-fold jump in its revenues.
• GST implementation is likely to lower taxes on the consumer durable industry and this will result in demand of the company’s product to rise, thus generating additional revenue.
• The business prospects and balance sheet look stronger than ever, with the upcoming Pay Commission, Q3 festive season and rural electrification focus, likely to drive strong demand for durables. Rural Markets which accounts for 69% of Indian houses and yet contributes a mere 10% of overall sales of the Company.

Investment Opinion

At CMP Rs. 960 the share price of Whirlpool is trading at a P/E of 47   and Whirlpool has a market cap of Rs. 11656 crore. Dynamic Levels recommend a buy on the stock with a price target of Rs. 1100 for a short term outlook.