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Whirlpool of India Limited — Q3 FY25 earnings call

Call held 7 Feb 2025

Management summary

Whirlpool India reported a strong operational turnaround in Q3 FY25, characterized by double-digit revenue growth and significant market share gains in its core refrigerator and washer categories. While profitability was impacted by a ₹15 crore e-waste provision, operational EBITDA grew by 52% YoY. The call was dominated by discussions regarding the parent company's decision to reduce its stake to 20%, which management framed as a move to grant the Indian entity greater strategic autonomy.

Highlights

Standalone revenue grew 12% YoY in Q3; 9-month revenue growth stands at 17.2% YoY
Standalone PBT reached ₹36.5 crores, representing a 65% YoY growth
Gross margins improved by 220 basis points YoY, driven by the 'Productivity for Growth' program
Market share gains in refrigerators and washers reached triple-digit basis points for three consecutive quarters
Working capital improved significantly to -3% of sales in September 2024 from 5% in September 2023
A one-time provision of ₹15 crores was taken for additional e-waste expenses due to new regulations
Whirlpool Corporation (Parent) announced a planned stake reduction from 51% to 20%

Concerns

Regulatory E-Waste Costs

Key financials

01 Revenue Growth (Standalone) 12% +12%YoY
02 PBT (Standalone) ₹36.5 Cr +65%YoY
03 EBITDA (Standalone) ₹44 Cr +13.5%YoY
04 Gross Margin Improvement 220 bps
05 Working Capital (% of Sales) -3%

What they filed

Q1 FY27: revenue up 11.4%, net profit down 34.1% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	1,582	1,565	1,890	2,317	1,502 −5%	1,624 +4%	2,030 +7%	2,582 +11%
Expenses	1,514	1,521	1,721	2,123	1,466	1,559	1,930	2,463
EBITDA	68	44	169	195	36 −47%	65 +48%	100 −41%	120 −38%
Margin	4%	3%	9%	8%	2%	4%	5%	5%
Other income	45	46	42	49	55	4	48	62
Interest	10	8	13	14	7	9	11	14
Depreciation	46	45	48	48	46	45	46	48
Profit before tax	57	36	150	182	38 −33%	15 −58%	91 −39%	120 −34%
Tax rate	27%	27%	26%	26%	28%	9%	27%	26%
Net profit	42	27	111	135	27 −36%	13 −52%	67 −40%	89 −34%
EPS	3.29	2.11	8.74	10.65	2.14	1.06	5.25	7.03

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Core Business (Refrigerators & Washers)
90% Revenue Contribution100 bps Market Share Gain

Guidance & targets

Revenue

Revenue Growth Revenue · Long-term · Medium confidence high single-digit

we had set high single-digit growth in revenues. And long term margins which would be in the high single-digit.

— Narasimhan Eswar, Managing Director

Margin

EBITDA Margin Margin · Long-term · Medium confidence high single-digit

And long term margins which would be in the high single-digit. I think we could only do things one step at a time.

— Narasimhan Eswar, Managing Director

Market Share

Market Share Gain Market Share · Quarterly · High confidence triple-digit

From April '24 to December '24, every quarter we have grown triple-digits versus the year ago in terms of market share.

— Narasimhan Eswar, Managing Director

Risks & concerns

Regulatory E-Waste Costs
high

New e-waste credit rates resulted in a ₹15 crore additional expense provision this quarter.

Management acknowledged
Competitive Intensity
medium

Competitors returning from factory strikes are expected to be aggressive in the fourth quarter to regain market share.

Analyst acknowledged
Employee Attrition and Morale
medium

The significant change in ownership structure could lead to incremental attrition at senior levels.

Analyst acknowledged

Areas of evasion (2)

Specific timeline for margin recovery
Future royalty fee adjustments post-stake sale

Q&A highlights

2 direct

Staff Cost Inefficiency vs Peers Direct

These retail executives are on the shop floor. They are our ambassadors for the brand... That's where we put in quite a bit of our focus in terms of our operating costs.

Analysts flagged that Whirlpool's staff costs (6.5-8% of revenue) are higher than peers; management defended this as a strategic investment in 'brand ambassadors' to drive conversion at the point of sale.

Asked by Naushad Chaudhary, Aditya Birla Sun Life

Timeline for Margin Recovery Partial

I do not have a time frame to give you at this point in time as to when we will get to that, but our intent is to progress steadily and strongly towards that goal.

Management was evasive on a specific timeline for returning to high single-digit EBITDA margins, calling it a 'multi-year goal' while focusing on current market share gains.

Asked by Ankur Sharma, HDFC Life Insurance

Parent Commitment Post-Stake Sale Direct

We view this anticipated sell-down as a win-win... It provides Whirlpool of India with increased flexibility, enabling it to focus on accelerated growth.

Investors are concerned that the parent's reduction to a 20% stake signals a long-term exit; management countered that it removes global process constraints and allows faster local decision-making.

Asked by Bhavin Vithlani, SBI Mutual Fund

2 min read 5 chapters

Detailed narrative

Operational Turnaround and Revenue Momentum

Whirlpool India has successfully transitioned from a period of declining revenue to 15 months of continuous growth. Standalone revenue grew by 12% in Q3 FY25, and 17.2% for the first nine months of the fiscal year. This turnaround is attributed to a combination of new product launches, such as the direct cool glass door range and Dynamix detergent dispensers, and a renewed focus on retail execution.

Market Share Gains in Core Categories

The company reported triple-digit basis point gains in volume market share for both refrigerators and washers across the last three quarters. Management highlighted that these gains were broad-based across regions (North, South, East, West) and categories, including a significant turnaround in the premium no-frost refrigerator segment, which moved from declining share to triple-digit growth in the October-December period.

Margin Expansion and Cost Productivity

Gross margins expanded by 220 basis points YoY, driven by the 'Productivity for Growth' program. This program targets both material and non-material cost productivity across all lines of the P&L. Despite a ₹15 crore provision for e-waste, standalone PBT grew by 65% YoY to ₹36.5 crores, demonstrating that the 'lines in between' gross margin and PBT are being managed effectively.

Strategic Shift: Parent Stake Reduction

A major theme of the call was Whirlpool Corporation's decision to reduce its stake in the Indian subsidiary to 20%. Management framed this as a 'win-win' that provides the Indian team with increased flexibility to make quick strategic decisions without the oversight of global processes. The parent company will maintain long-term brand and technology licensing agreements, ensuring continued access to global innovation.

Investment in Retail Execution

Management defended its higher-than-peer staff costs by explaining a shift in strategy toward 'brand ambassadors' on the shop floor. These retail executives are tasked with convincing consumers at the point of sale, which management views as a high-ROI marketing investment rather than a simple administrative cost. This strategy is credited with driving the recent market share gains and premiumization of the product mix.

This is an AI-generated summary of a publicly available earnings call transcript.

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