The stock of Whirlpool of India is up over nine per cent today. The gain over the past three sessions is almost 18 per cent, thanks to the robust June quarter numbers. The company has reported a 19 per cent sales growth and a 67 per cent jump in net profits, year-on-year. Operating margins stood at 12.7 per cent, almost three percentage points higher. Raw material costs as a percentage of sales dropped to 64.8 per cent from 67 per In the June 13 quarter.
The company's MD has been quoted in reports saying that there was a revival in demand in the quarter on improved consumer sentiments. Whirlpool's new models for the premium market have been doing well in the last couple of months.
The numbers from Whirlpool surprised the street as IIP Consumer Durable index continues to be depressed. Though the index reported a 3.4 per cent growth in May, in June it dropped by a sharp 23.4 per cent.
Whirlpool's strong growth is to some extent thanks to the low base. In the June 2013 quarter, the company's net profit was down 23 per cent after a drop in sales and severe margin pressure.
However, the real test for the company will be the December quarter. The advantages arising from base effect will go away by the quarter ending September.