Whirlpool of India Ltd. share price target

Whirlpool reported Q4FY17 net sales of Rs 10.1 bn, up 20% YoY in a seasonally strong quarter for Refrigerators (55% of sales) and Air-conditioners (10% of sales). This was above our estimate of 16% YoY growth. Gross margin declined110 bps to 41.5% likely due to input cost inflation.

BUY Whirlpool of India Ltd at CMP Rs. 917 and add on dips Rs. 820-850 to band for the Sequential Targets Rs. 1030-1113

Company diversified its existing product portfolio from refrigerators & washing machines to air conditioners, microwave oven, built-in appliances, induction cook top & water purifiers. Company is expecting double-digit profitable growth in future, while continuing to focus on expanding its product portfolio and footprints in terms of numeric reach and in-store execution as well as driving manufacturing efficiencies. Now, company is looking to ramp up its footprint and portfolio in built-in appliances segment with Kitchen aid apart from its biggest businesses i.e. refrigerators and washing machines....

Whirlpool India ltd (WIL) is well positioned to benefit from the impending 7th pay commission. It is expected that slightly over Rs 1 lakh crore of incremental salary in the hands of government...

Reviving Consumer Demand: Since 2012, there was very low demand for consumer durable goods in the Indian market; mainly due to rise in interest rate, food inflation, reduction in disposable income, slow down in GDP and many other factors. But during FY15, the market has witnessed growth in consumer expenditure in durable goods which has also reflected in the Whirlpool's top line which grew by 16.6% in FY15 from 2.2% in FY14. Also we have observed that the revenue of Whirlpool is highly correlated with the Monthly Per Capita Expenditure (MPCE) on Durable Goods 87% & 85% correlation with Rural MPCE and Urban MPCE respectively.

Whirlpool India ltd (WIL) is a subsidiary of US based company Whirlpool Corporation, which is one of the largest players in global home appliances industry with annual sales of USD 20...