Whirlpool posted a 48.4 percent rise in its third quarter net profit led by strong operational performance. Total income of home appliance company grew 7.2 percent to Rs 721 crore in the quarter ended December 2014 from Rs 673 crore in the year-ago period.
Discussing the results, Shantanu Dasgupta, Vice President-Corporate Affairs and Strategy-Asia South, Whirlpool, said the Q3 topline was driven by volume growth and mix improvement. The company delivered a 4.5 percent volume growth during the quarter.
January sales have seen a good rebound, said Dasgupta, adding that the 9-month volume growth currently stands at over double-digits and the bulk of it has come from large cities. He however feels that the growth needs to become more broad-based across segments.
Exports contributed around 10 percent to company's topline. Cost-side pressures have been soft, aiding margins considerably, Dasgupta said. The company has also benefitted from stable currency, decline in oil prices and softening in commodity costs, he added. He is hopeful of closing FY15 with revenue growth of 10-15 percent.
Below is the transcript of Shantanu Dasgupta’s interview with Nigel D’Souza on CNBC-TV18.Q: Your total income has come in higher by close to around 7 percent, break that up for us, volume as well as is there any price increase that is factored in at 7 percent increase? A: No, this increase is primarily coming from volume and mix perhaps a little bit from price but primarily volume and mix. Volume was up by 4.5 percent and the revenue was up by about 7 percent as you said but it has been a favourable mix that has contributed to this.
Q: For the first nine months what is your volume growth, for the quarter is 4.5 percent? A: We did about 14 percent in September and about 7 percent in June so cumulatively it would be in double digits. The previous quarter was a little low on volume, we had a terrific build up to Diwali but the post Diwali slump caught us by surprise not just in Whirlpool but across the industry. However, we recovered in January and seem to be on track for this quarter. Q: You are talking about the mix and that is what has aided some kind of growth on the revenue front. Could you break that up for us because I believe last time around there was a good amount of growth in the top end of the market so those more premium ACs they were seeing good amount of interest. Could you tell us what exactly is going on, are we seeing that kind of growth being spured by the top end as well? A: Without getting into segments I have to tell you here that growth that we saw in the last peak selling season which was during the festival was not secular. It wasn’t across the board, across states, across format stores, big town small town. The growth seems to have come from big cities and large format stores. Also, if I have to pin it down to segments we have also seen decent growth at least in our portfolio in the frost-free segment which is the more premium side of refrigerators. So, therefore while one talks about growth I think it is not uniform, it is a bit patchy that we have been seeing so far and while there are a lot of upsides on the supply side the demand side is still somewhat soft.
Q: Could you tell us about your exports, what is going over there and could you also tell me what is the breakup for exports, how much does it contribute to your topline? A: Exports is about 10 percent of our topline. It has grown handsomely; it has grown by about 18 percent or so in the last quarter. The exports, our primary countries to which we export is around India itself – Bangladesh, Sri Lanka, SAARC countries. We do a bit to Australia, we do a bit to Eastern Europe but the bulk of it comes from South Asia. Q: Are you seeing good traction over there? A: Somewhat, Sri Lanka hasn’t performed up to our expectations. Bangladesh has been strong and we are now reaching out to markets even in the Pacific Island such as Fiji and exploring Papua New Guinea and such markets. However, in overall terms when you look at our turnover it is primarily a domestic play.
Q: The biggest positive for you has definitely been your margins. If you calculated as per the standard norm of calculating margins, it is at around 7.5 percent so that is a good 200 basis points expansion on the margin front. I track commodities closely so I am aware that various commodity prices steel, aluminum and the likes all of them have been lower just in the last quarter. So, 7.5 percent do you look to maintain this or do you think that the best is yet to come and how exactly are you getting this big margin expansion? A: Without getting into specifics as I just said we are seeing a lot of positives on the supply side, we are seeing currency stable, we are seeing softening of commodity prices, we have seen huge decline in the price of oil and therefore when you look at all of these factors then cost side pressures are somewhat less than what we have faced in previous quarter. However, the only remaining concern is demand. As I said it is a bit patchy but we are pretty confident that, that too will pickup. In the real sense, the calendar year 2014 and even the fiscal year 2014-2015 has been better than the previous and we have no reason to believe that it will be any worse in the next financial year. Q: Could you give us some guidance for this year, your nine months have been splendid but for this year itself, last quarter going to be much better? A: Cumulatively on revenue terms we are about 15-16 percent ahead of the previous year. We originally said our revenue growth would be in the region of 10-15 percent and I see no reason that, that should not be met. Beyond that we do not make give any guidance; that is done only by the corporation but since I am speaking to you I can only tell you about the topline nothing beyond that.
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