Whirlpool - Q3 FY21 Result Update - YES Securities

Inline revenue with slight miss on margins

- View - Stock trades at 43x FY23 EPS which is at discount to its peers like Havells and Hitachi. Given the quality of balance sheet and high cash balance and improvement in margin stock should command better multiples. We continue to remain positive on stock.

- Result summary - Revenue growth was in line with the estimates, while contraction in gross margin leads to margin miss. Revenue/EBITDA grew 17.5%/12.2%. Higher interest, depreciation and lower other income led to decline in PAT.

- Margins - Gross margin contracted 292bps yoy on change in product mix towards high end refrigerators and high commodity prices. Consequently EBITDA margin contracted only 32bps yoy on cost control initiatives. Company had refrained from taking any price increase in 3Q to offset higher commodity prices leading to contraction in gross margins. Cost control initiatives and lower A&P spends might have led to marginal increase in other expense.

- Near-term outlook - Demand for both refrigerators and washing machines continue to remain strong, and our interaction with the dealers suggest company has taken prices increases from 1st Jan to offset commodity price inflation. We believe with strong demand momentum and gross margin improvement in Q4, we expect expansion in EBITDA margin.

Shares of WHIRLPOOL OF INDIA LTD. was last trading in BSE at Rs.2439 as compared to the previous close of Rs. 2447.7. The total number of shares traded during the day was 19505 in over 2768 trades.

The stock hit an intraday high of Rs. 2625 and intraday low of 2411. The net turnover during the day was Rs. 47952065.

Source : Equity Bulls

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