it could be a good buy
Q3 FY24-
Risk- High competition, slowdown in consumer durable market.
Guidance- High single digit revenue and 7-8% margins CAGR bcz they lost market share, high competition is there and bcz durable market is not growing very fast .
Global Whirlpool Corporation has decided to sell up to 24% of its stake to reduce DEBT at group level.(Sold on 20Feb 2024- Large Red sell bar on Technical)
Refrigerators -55% of our business.
Washer - 30 percent of our business and
other categories -make up the rest.
No huge Capex plan in near future.
The improvement in profit was driven by the strong volume growth , the actions, very, very focused actions on driving the high margin premium SKUs product mix and the cost productivity supported by the strong P4G thatās productivity for growth program which helped us save cost across most line items of the P&L, and the impact of decrease in commodity prices as well. All these things have helped both then offset the impact of price reduction, which we took at the beginning of the year, and the regulatory cost of charges on the refrigerator business, which we had to absorb in the P&L during the year
Increased our ownership in Elica India from 49% to ~87% in 2021. ** (Kitchen chimney and stove and other products)
So I think Elica is really another name for innovation in this market and cooking. Strong distribution presents, and a strong brand awareness. We are also working to establish Whirlpool as a mass premium cooking brand in the same segment so that we have two brands playing in the cooking space.
Focus on premiumization of products.(not 1-2 product but the whole category)
P4G ( productivity for growth ) program to increase productivity and growth.
From 2024 Jan, we are going to be offering a 4 year comprehensive warranty on all the semi-automatic washers that we manufacture.This will help in gaining consumer trust and increasing market share.
Large distribution network.
Change prices and strategy in last one year to gain market share.Also employed many retail executives to increase sales and PAT.
Then the product portfolio that we have. So we got a diverse product portfolio across multiple categories including refrigerators, washers, cooking, and so on and so forth. Weāve got a factory in Faridabad that basically makes refrigerators and makes semi-automatic washing machines. Weāve got a factory in Pune that makes frost free refrigerators and direct-cool refrigerators. And weāve got a factory in the south of India in Puducherry, which makes washing machines.
The revenues as well as the market shares took a beating as we went through 2022, 2023 with the result that we ended up growing revenues about 3%, but profitability dropped to about 4% by 2022, 2203, and we were losing market share quite strongly by then.
But weāre also very, very, very proud to basically get from the Honorable President of India, Shrimati, Droupadi Murmu, the Appliance of the Year for the refrigerator category at the National Energy Conservation Awards in December, 2023. And this was a moment of great pride for us. It showed the quality of the products. This was for our 215 liter DC product, the 215F model. And I think this also goes to show the quality of the products that we basically make. So that was in direct-cool refrigerators.
But with ozone refresh technology, you can actually use the ozone refresh button and we have an ozonizer in our machine, and the advantage of this is that it refreshes your clothes and removes all the odor from it without water or detergent. So this is an added feature that we give on our fully automatic washers on top of the benefits that we already serve.
Iām glad to announce that there is a new product coming soon in the premium end of the semi-automatic category
Key focus- The first is quality, the second is cost, third is Execution. If I look at quality, we follow the world class manufacturing practices. I had already updated last time that our Pune plant got the bronze in world class manufacturing in 2021 and our Faridabad plant got the bronze in 2022. Iām extremely happy to announce that our Puducherry plant as well as our third plant has also got bronze in October, 2023, and we will continue this March on the world class manufacturing, driving our quality more and more ahead as we go along.
If the ROI is not very clear to us, then we figure out what ROI is before we put significant amount of money behind everything. So thatās a very simple and straightforward strategy.
Also started focusing on - Online Marketing and sales from e-com.
Changed Sales force incentive structure(Incentives are very imp- Charlie Munger),they get incentive on the basis of how much Volume and Value they are generating.
And of course, if you look at front load washing machines , again, thatās a place where the opportunity is very, very significant for us because weāve just launched in 2022 . So as you can imagine, our shares are quite low, and therefore the opportunity to grow there is very, very significant.
So in categories where we find that we can get reasonably competitively priced products to our specifications because Whirlpool has very clear and demanding specifications, then we have no problems in outsourcing it. A classic example is air conditioners where we donāt manufacture them ourselves. We get good products to our specifications, which are quite exacting, and we get that. Similarly for microwave ovens, we donāt manufacture that ourselves, and we basically get that done through third party suppliers. So yes, absolutely thatās part of the strategy.
Not focusig much on export.
Bonus- Deleveraging
Margins can reverse to mean.
First ever concall
SBI Fund bought 2% stake at Rs 1277
5 Likes
Very good morsel of information.