Whirlpool of India Q3 Results Review - Market Share, Margins Set To Improve; Upgrade To Buy: Yes Securities

Yes Securities Report

Whirlpool of India Ltd.'s consolidated revenue came inline with the estimates. Revenue grew 17.9% YoY. Double digit revenue growth was driven by executional excellence, cost productivity and shifting of festive season with more festive days falling in Q3 versus Q2 in previous year.

Volume across the category grew for Whirlpool with them grew faster than the market resulting in market share gains. The company has rationalised the prices and have added significant amount of retail executive that have enable to derive incremental revenue from the distribution.

Whirlpool expects growth momentum to continue in the ensuing quarters as well. The company has guided high single digit revenue and margins over longer term. This guidance is given taking current environment into account where durables industry is facing growth challenges and competitive intensity is significantly high.

Guidance will be revised if the current environment changes. Gross margin has improved ~35 basis points on stable raw material prices, however it is still below its historical high that company used to enjoy, hence there is further scope for improvement.

Ebitda margin has remained in low single digit as pricing action and increased investments in retail executive has resulted in higher costs negating benefit of cost takeout program.

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