Bookmark and Share

Whirlpool Corporation – Why we think its a Buy

1 Comment

Whirlpool Corporation

  • Whirlpool Corporation is an American multinational manufacturer and marketer of home appliances
  • Headquartered in Benton Charter Township, Michigan, United States
  • Listed in Fortune 500
  • Annual revenue of approximately $18.4 billion
  • Employs more than 70,000 employees
  • More than 70 manufacturing and technology research centres around the world
  • Whirlpool Corporation surpassed Electrolux to become “the largest home appliance maker” in the world,  in March 2006 after acquiring Maytag Corporation.

Whirlpool India

Company entered the Indian market in the late 1980s when it forayed into the market under a joint venture with TVS group. Soon Whirlpool acquired Kelvinator India Limited in 1995 and entered into Indian refrigerator market as well. Post merger the company established itself as leaders of appliance and named itself as Whirlpool India. Most recognized brand in home appliances in India and holds a market share of over 25%.

Read more about List of Electrical Home Appliance Companies in India.

Advantages for Whirlpool India

  • The long terms growth of home appliances seems secure given the low penetration of appliances, especially with a huge rural market still to be tapped.
  • Growth will be further fuelled by aggressive pricing and easy finance options which manufacturers routinely offer.
  • Growth opportunities will be at both entry level and high-end segments.
  • Whirlpool of India has made huge investments over the last year and its new launches of consumer relevant innovations across all its categories will drive the Whirlpool brand to market leadership.

Performance of the Company

  • During the year ended March 31 2012, sales of the Company, was Rs.285,047 Lacs as compared to last year’s sales of 289,912 Lacs down by 1.7%.
  • PBT was Rs.18,131 Lacs as compared to corresponding profit of Rs.23,924 Lacs in the previous year (Due to flat to negative industry growth).

Reasons for Growing Demand & Market Development

Market growth of the home appliance industry slowed down in the financial year 2011- 2012. The prime reasons for this were rise in consumer price due to escalation of commodity costs, rise in interest rate and reduction in disposable income, leading to deferment of purchases, and a brief and mild summer in many parts of the country, adversely impacting sales of refrigerator and air conditioners. While the market declined in the last financial year and the business outlook remained challenging, the long term opportunity for this industry is positive, given the low level of appliance ownership in this country. As the market evolves, some definitive trends which will shape the market:

  • Finishes and designs are playing an increasingly important role driven by consumers in the less than 30 year age group looking for lifestyle products.
  • Washing machine segment is expected to witness robust growth as more women enter the workforce necessitating in aids to reduce their household chores.
  • Modern retail is growing but not at the pace at which the consumers are demanding a better shopping environment which is creating opportunities for franchised brand shops of individual brands. This phenomenon is now being seen in small towns also.
  • The increasing demand for modern housing with modern modular kitchens is increasing the demand for kitchen appliances like hoods and hobs. At the premium end built-in suits of ovens, microwave & dishwashers present an interesting opportunity.

 Risks and Concerns for Whirlpool India

  • Inflation and rise in commodity prices have been the major concerns for most part of the last fiscal year and continues to be a concern.
  • Demand is likely to be low for some time and will rise as consumer confidence returns with improvement in the economic scenario.
  • High marketing and infrastructure investment by competition and influx of new multinational brands (Japanese) creates additional pressure on their advertising and promotion budgets.

Whirlpool Stock

The stock Whirlpool of India is currently hot scrip to select. There is a strong upside for the stock owing to the fact that company would perform well, on the grounds of improved economy performance in the coming year. An upside of 20% from the current level of 235 can be seen in the coming year, despite the fact that Q3 net of the company dipped to an extent of 52% recently.


Niraj Satnalika

Niraj is an MBA in International Business (Finance). Prior to this he completed B.Tech in Electronics and Instrumentation. He is currently working with Confederation of Indian Industry (CII), Kolkata in capacity of Consultant. Satnalika is actively involved with an NGO and works towards promoting education among the underprivileged.

One Response so far | Have Your Say!

  1. refrigerator repair Mandeville

    Very energetic article, I enjoyed that a lot. Will there be a
    part 2?