Microsec Research
Whirlpool of India (Buy)
CMP: ₹443
Target: ₹580
We continue to recommend Whirlpool of India a ‘Strong Buy’. Whirlpool of India is the subsidiary of world’s largest consumer durables company Whirlpool Corporation, US. The parent company is headquartered at Michigan, US, having global presence over 170 countries and manufacturing operation in 13 countries with 11 major brand names such as Whirlpool, Kitchen Aid, Roper, Estate, Bauknecht, Laden and Ignis. Diversification of products in a single segment, launching of new models and rupee appreciation/ stable commodity prices to increase margins and ease pricing pressure, new stable Government to lead to well balanced economy and ensure level playing field.
Currently the industry P/E is trading at the levels of 38-41x, much higher than the company’s P/E of 36.8x. Also, the 2- year forward industry P/E is expected to trade at 21x compared with company’s P/E of 12x. The Q1FY15 top-line y-o-y robust growth of 19 per cent and bottom-line growth of 67.4 per cent gives some signs of revival in the company’s performance with management’s active strategies mentioned above in the key highlights. Consequently, post this performance the company deserves a higher growth rate in future.
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