Buy Whirlpool of India; target of Rs 1390: KRChoksey

KRChoksey's research report on Whirlpool of India

Whirlpool of India Ltd (WOIL) posted its Q1FY18 results. Net revenue for Q1FY18 was at INR 16,178.8 Mn which grew by 15.0% YoY and 45.2% QoQ. The revenue was in line with our estimates due to seasonality of cooling products and GST implementation enabled the company to sell of the inventories. EBIDTA for Q1FY18 stood at INR 2,107.6 Mn with margins of 13.0% which was an increase of 184.7 bps QoQ and decrease of 50.4 bps YoY due to higher raw material and employee cost. However the company ran out of inventory due to GST and there was sharp reduction in inventory by 162% QoQ. PAT for Q1FY18 stood at INR 1,327.2 Mn and PAT margin was at 8.2% which saw a decline of 46.9 bps YoY and an increase of 152.8 bps QoQ.

Outlook

we expect the Revenue and PAT to grow at CAGR of 13.9% and 23.2% respectively between FY15 and FY19E. We have a “BUY” rating on the stock with Target Price of INR 1,390 representing an upside of.