Hold Whirlpool of India; target of Rs 1170: Axis Direct

Axis Direct's research report on Whirlpool of India

Whirlpool reported Q4FY17 net sales of Rs 10.1 bn, up 20% YoY in a seasonally strong quarter for Refrigerators (55% of sales) and Air-conditioners (10% of sales). This was above our estimate of 16% YoY growth. Gross margin declined 110 bps to 41.5% likely due to input cost inflation.

Outlook

We estimate 15% sales growth in FY18/19 given a favorable macro; flat/+50bps EBITDA margin given rising input costs, high competition which could be partially offset by scale benefits. Roll forward to FY19E; Maintain HOLD with revised TP of Rs 1,170 (30x FY19 EPS).