Whirlpool enters list of top 100 Indian firms by m-cap; stock hits new high

Shares of Whirlpool of India continued their northward journey for the fourth straight day on Thursday and hit a new high of Rs 2,407, up 4 per cent, on the BSE on consistently strong financial performance.

In the past four trading days, the stock has rallied 12 per cent, as compared to less than 1 per cent rise in the S&P BSE Sensex. A sharp gain in the market price has seen the consumer electronics company enter the list of top 100 companies with highest market capitalisation (market-cap).

At 01:13 pm, Whirlpool of India’s stood at number 92 position in the overall ranking, with market-cap of Rs 30,347 crore, the BSE data shows. It was ranked 153 in the beginning of the current calendar year 2019 (CY19). Thus far in the CY19, the stock has zoomed 73 per cent, against 13.5 per cent rise in the benchmark index.

Whirlpool of India is primarily engaged in manufacturing and trading of refrigerators washing machines, air conditioners, microwave ovens and small appliances and caters to both domestic and international markets.

Whirlpool of India posted a healthy 19 per cent year on year (YoY) growth in its consolidated revenues to Rs 3,368 crore in first half (April-September) of the financial year 2019-2020 (H1FY20), despite facing capacity constraints of direct-cool refrigerator. Profit before tax jumped 19 per cent at Rs 443 crore over the same period last fiscal. Ebitda (earnings before interest, tax, depreciation and amortisation) margin improved to 15.32 per cent from 15.03 per cent during the period.

As per management, strong product launches along with execution ramp up and market share gains has led to healthy growth in sales, margins and earnings. Despite recent slowdown in consumer spending, the company is confident of sustaining double digit sales growth over the medium term.

The key growth drivers of consumer durable industry in India are low penetration, rising GDP per capita and improved electrification. However, other emerging markets such as Russia, China and Brazil are 2 to 3 times the size of India in terms of various product categories. Hence, India still has a lot of headroom to grow.

Analysts at Nirmal Bang Securities continue to remain optimistic about Whirlpool of India outpacing industry growth and expect it to report a healthy 16 per cent revenue CAGR over FY19-FY22E. With a 130bps margin expansion and rising other income, the earnings CAGR is likely to be much higher at 29 per cent over FY19-FY22E, the brokerage firm said result update. It maintains ‘buy’ rating on the stock with a revised target price of Rs 2,535 from earlier Rs 2,205 per share.