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Result Highlights:

During Q1 FY23, the top-line jumped 55.2% YoY to Rs.2,081.0 cr on a lower base of Covid affected Q1 FY22. Sequentially, the top-line registered a healthy growth of 21.9% from Rs.1706.9 cr. The EBITDA margin stood at 6.3% as against 8.6% in Q4 FY22 – the fall in margins was primarily on account of significant rise in commodity costs. At the net level, WIL reported 4.1% profit margin as compared to 1.9% in the corresponding quarter of previous fiscal and 4.9% in the previous quarter. The company reported an EPS of Rs.6.7 as against Rs.2.0 in Q1 FY22 and Rs.6.6 in Q1 FY22. The Chairman stated that, “We had a record top line this quarter on the back of significant price increases taken earlier. While inflation has peaked, its impact on consumer demand is still playing out. Our cooking business continues to progress well and we remain confident that this will develop into another pillar for us. Further, the Managing Director listed that, It was a strong start to the year with robust revenue growth of 55% and PAT growth of 230% although on a low covidimpacted quarter. The industry showed good recovery in mid and premium while the entry segment was muted with inflation putting stress on consumer spending. We remain confident in Whirlpool's ability to successfully navigate through what is likely for some time to be a volatile external environment.

OUTLOOK AND VALUATION

WIL is a leading home appliances maker with leadership in refrigerators and washing machines. The company is backed by strong parent and a global leader, Whirlpool Corporation, USA. The parent is keen on making India a manufacturing hub and a global sourcing major, thereby, enhancing capacities. The Management is also focusing on increasing dominance in other product categories which are currently small. Further, the strong fundamentals including consistent growth, debt-free status, robust cash position, relatively high margins, negative working capital cycle alongwith strong brand equity plays a key role. We remain optimistic on the business in the long run in light of low penetration rates of electric goods, rising per capita income and growing number of electrified villages in the country. For now, we maintain our estimate of FY23 EPS at Rs.46.3 and our target price of Rs.2,500; ~40% upside from current levels with an investment horizon of 12-18 months.

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