Whirlpool India Rs 1100
A river that starts in the mountains flows steadily downward, unstoppable despite occasional pauses from obstructions or flat terrain. It always resumes its descent — that’s gravity.
India’s consumer durables story is a lot like that river. Growth may stall now and then — rural demand might dip, urban jobs may lag, geopolitics may act up — but the combo of low product penetration and rising incomes is like gravity: hard to stop.
According to Statista, penetration in India at the end of 2023 stood at ~10% for ACs, 20% for washing machines (WMs), and 33% for refrigerators (Refs), compared to 100% in China. This vast, long-term opportunity is reflected in the high valuations of Indian consumer durable companies: Blue Star (PE 76), Voltas (60), Johnson Controls (92), Eureka Forbes (70), and Havells (73).
In this context, Whirlpool is intriguing.
It’s the #3 player in WMs and Refs with 9MFY25 market shares of 12.8% and 8.3%, respectively. After several weak quarters, it showed a sharp turnaround: 17% revenue growth, 43% EBITDA growth, and 68% PAT growth. Market share rose 50 bps in both categories. At an estimated FY25 EPS of Rs 25, the stock trades at a PE of 42 — much lower than its 5-year average (~80) and lower than peers. As per 9MFY25 conference call, management feels that the company has certainly turned around with the launch of new models and revamped sales strategy.
Yet the stock has fallen from ~Rs 2400 in Oct 2024 to ~Rs 1100. Why?
The parent company, Whirlpool Inc., announced in Jan 2025 that it’ll cut its stake in the Indian arm from 51% to 20% to reduce its own debt. That spooked the market and led to multiple circuit breaks. Stake cuts by promoters tend to trigger panic, even though this move is part of Whirlpool Inc.’s global strategy.
So — bargain or trap?
There are two big variables:
1) How the stake is sold: Dumping shares on the open market could hurt. Bringing in a solid strategic partner? Big win.
2) Royalty rates: Whirlpool India pays 1.4% of sales as royalty. If that jumps to 3%, profits could take a 30%+ hit. Management hasn’t said much on this.
At this point, investing in Whirlpool is a coin toss. Only time will tell how the above factors play out. Depending on the outcome, the stock could see sharp movement on either side. Investors with high risk appetite may find Whirlpool to be a cool bargain while conservative ones might fear being taken to the launderers. So, would you back it right away or wait for the dust to settle?