Whirlpool Q3 net Profit Jumps 23%

Washing machine, refrigerators and another consumer durable maker Whirlpool of India continued to deliver strong results on the back of market share gains.

The company reported a 22.9% rise in its consolidated net profit to Rs 76.49 crore for the fiscal third quarter ending December 2019 as compared to a net profit of Rs 62.23 crore in the October-December quarter a year ago.

It s total income was up 5.8% at Rs 1,310.69 crore during the quarter under review as against Rs 1,238.41 crore of the corresponding quarter last fiscal.

Revenue growth during the quarter under review was temporarily impacted because of a shift in Diwali timing and softer consumer demand.

The company expects to see consumer demand returning to growth starting this March quarter and remain very optimistic about our business.

Total expenses of Whirlpool of India, a subsidiary of Whirlpool Corporation, were at Rs 1,214.01 crore as against Rs.1,144.49 crore of the corresponding quarter, up 6.07%.

Whirlpool share price continues to feel the overhang from the recall of 500,000 washing machines in UK by its parent group.

The machines, branded as Hotpoint or Indesit, were sold for more than five years, but their door locking system can overheat creating the risk of fire.

Owners face the prospect of doing without hot washes for months until products are fixed or replaced.

On a longer-term basis we expect WIL to post 15% revenue CAGR over FY20E-FY22E, led by distribution reach expansion, focused execution on the shop floor through innovative product launches, plugging of portfolio gap (front-load washing machines, high-end refrigerators), entry into new product categories (dishwashers, air purifiers, water purifiers), scaling up of cooking product range post-acquisition of 49% stake in Elica India and capacity expansion in core product categories (direct cool refrigerator, semi-automatic washing machine)

Hence this MNC stock should not be ignored for one-quarter of underperformance but from a long term perspective looks interesting.

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