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Whirlpool Q2 Review - Earnings Disappoint On Topline Miss: Motilal Oswal

Whirlpool Q2 Review - Earnings Disappoint On Topline Miss: Motilal Oswal

Whirlpool will target higher double-digit growth across all our segments, outpacing the industry, says MD Sunil D’Souza. (Photographer: Daniel Acker/Bloomberg)
Whirlpool will target higher double-digit growth across all our segments, outpacing the industry, says MD Sunil D’Souza. (Photographer: Daniel Acker/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Whirlpool of India Ltd.’s Q2 FY22 revenue came in flat YoY and was 11% below our estimate.

The two-year revenue compound annual growth rate stood at 7%, weaker versus peers. While demand improved in the mid and premium segments, it was impacted by supply-side volatility.

Flat revenue growth implies negative volume growth, likely in entry-level segments. This poses a risk to consumption demand and makes Q3 FY22 a key test for the same.

While the gross margin contracted 460 basis points YoY, Ebitda margin compression stood at 330 bps. Thus, Ebitda stood 29% below our estimate, with margins at 8.1% (estimate: 10.1%).

Given likely negative volume growth, we believe Whirlpool of India has started working on its cost structure – employee costs declined 6% QoQ and other expenses as a percentage of sales improved 120 bps YoY to 16%.

Click on the attachment to read the full report:

Motilal Oswal Whirlpool Q2FY22 Result Update.pdf

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