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Brokerages expect further upside in Whirlpool after Q4 profit jumps 40%; here's why

The consumer durables maker on June 15 reported a 40.84 percent jump in consolidated profit to Rs 130.06 crore for the fourth quarter ended March 31, 2021 on account of higher revenue from operations. Its revenue from operations was at Rs 1,779.39 crore during the March 2021 quarter, up 31.45 percent compared to the year-ago period.

June 16, 2021 / 10:25 AM IST
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Whirlpool of India share price gained over a percent in the morning session on June 16, a day after the company declared its March quarter results.

The consumer durables maker on June 15 reported a 40.84 percent jump in consolidated profit to Rs 130.06 crore for the fourth quarter ended March 31, 2021 on account of higher revenue from operations. The firm had posted a profit of Rs 92.34 crore during the January-March quarter of the previous financial year.

Its revenue from operations was at Rs 1,779.39 crore during the March 2021 quarter, up 31.45 percent compared to the year-ago period. It stood at Rs 1,353.62 crore in the same period a year ago, Whirlpool of India said in a regulatory filing .

The stock was trading at Rs 2,354.55, up Rs 2.70, or 0.11 percent. It has touched an intraday high of Rs 2,418.95 and an intraday low of Rs 2,350.

Research and broking firm Motilal Oswal in its report said that Whirlpool’s 4QFY21 2-year revenue CAGR of 14.6 percent is best in its coverage universe and provides confidence that the company continues to see market share gains rather than general apprehensions of a risk to market share.

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"While topline growth has been at par with our coverage universe companies, the low base of FY21 should help in faster earnings growth as peers witness margin erosion from a high base of FY21. This should help the stock catch-up with its peers. To account for the second COVID wave, we cut our FY22E/23E EPS by 20 percent/4 percent and target to Rs 2,900 (from Rs 3,020 earlier) based on unchanged target FY23E P/E of 55x and maintain buy," it said.

According to a report by research firm YES Securities, Whirlpool delivered a mixed set of results with revenue beating expectations and EBITDA coming in-line with estimates.

"Sharp reduction in other income resulted in lower than estimated PAT. Gross margin contracted 247bps which is attributable to higher commodity prices. The company saw strong growth in Q4 with all categories and geographies showing strong double-digit volume growth. Cost rationalization has resulted in EBITDA margin expansion despite sharp contraction in gross margins.

"We expect FY21-23E revenue/EBITDA/PAT CAGR of 16 percent/34 percent/46 percent on a favorable base and arrive at our price target of Rs 2,794 per share valuing the company at 50x FY23 EPS," it added.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Jun 16, 2021 10:25 am

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