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Whirlpool of India Q1 Review - Correction In Input Prices To Improve Profitability: ICICI Securities

Whirlpool of India Q1 Review - Correction In Input Prices To Improve Profitability: ICICI Securities

<div class="paragraphs"><p>An employee stands next to a Whirlpool washing machine inside a home appliances showroom in New Delhi. (Source: Reuters/Anindito Mukherjee)</p></div>
An employee stands next to a Whirlpool washing machine inside a home appliances showroom in New Delhi. (Source: Reuters/Anindito Mukherjee)

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ICICI Securities Report

Revenues of Whirlpool of India Ltd. grew 55.2% in Q1 FY23, on a favorable base of Covid impacted Q1 FY22. Three-year revenue compound annual growth rate is only 1.8%, implying no volume growth.

Steep input inflation, increase in competitive pressures and limited price hikes (our view) resulted in this dent in gross margins. We continue to believe these issues are transitory in nature and should get resolved in FY23-24.

We also note that a large opportunity in white goods offers healthy long-term growth potential. While we see a short-term impact (in Q2 FY23) due to steep inflation in input prices and we cut our estimates to factor in continued impact on profitability.

We believe Whirlpool of India is likely to protect market shares (even at the cost of margins) in the medium term which is discounted cash flow accretive. Growth in high Ebitda margin Elica business will also be margin accretive for the company.

Click on the attachment to read the full report:

ICICI Securities Whirlpool Q1FY23 Results.pdf

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