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Result Highlights:

During Q4 FY21, the top-line recorded a robust 31.5% YoY growth and was above our estimate; the top-line was driven by both strong volume growth alongwith healthy price hikes. The EBITDA margin stood at 10.7% as against 10.1% in Q4 FY20 – the slight improvement in margins was on account of lower other expenses and staff costs, as a percentage of revenue partially offset by lower gross margins. At the net level, WIL reported 7.3% profit margin as compared to 6.8% in the corresponding quarter of previous fiscal, broadly highlighting the operating level performance.

On full year basis, the turnover was 3.6% higher than our estimate; nevertheless, the EBITDA margin and net margin were in-line with our estimate. For the year ended March 31, 2021, the company reported a top-line of Rs.5,900.0 cr (-1.5%, YoY) – the EBITDA stood at Rs.519.0 cr as against Rs.673.4 cr in FY20 and the EBITDA margin contracted from 11.2% to 8.8%. At the net level, the company reported a profit of Rs.351.8 cr as against Rs.490.2 cr in FY20 translating into an EPS of Rs.27.7. On the balance sheet front, the company continues to be debt-free and the net-worth has jumped from Rs.2,563.5 cr to Rs.2,858.3 cr during the year.

The cash and cash equivalents stood at Rs.2,063.2 cr as on March 31, 2021 as compared to Rs.1,662.3 cr as on March 31, 2020 (which also included an investments of Rs.378.3 cr). The cash per share works out to be Rs.162.6. The board of directors have recommended a final dividend per share of Rs.5. In a press release, the Chairman stated, “Whirlpool has delivered a very strong quarter across all financial levers. Underlying growth momentum in the home appliances industry continues to be very healthy. Despite the headwinds due to the re‐emergence of COVID and inflationary trends, we remain optimistic about the longer term trends for our business.”

Further, the Managing Director said, “It was a really strong end to the year with an acceleration in top-line growth and profitability. The performance came on the back of strong and broad based double digit volume growth. All categories and geographies showed continued momentum which helped end the year with the business growing ahead of markets. We continue to be optimistic about our short and medium term prospects.”

OUTLOOK AND VALUATION

WIL is a leading home appliances maker with leadership in segments such as refrigerators and washing machines in particular. The company is backed by strong parent and 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, debtfree status, robust cash position, relatively high margins, negative working capital cycle alongwith strong brand equity plays a key role.

Going forward, in-line with the Management we continue to remain optimistic on the business and since WIL’s full year performance was in-line with our estimates we keep our estimates for FY22 and FY23 unchanged. We continue to expect WIL to deliver an EPS of Rs.51.9 in FY23; assigning a target multiple of 54x we arrive at a target price of Rs.2,802 thereby maintaining our previous target price for an investment horizon of 18-24 months.

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