Whirlpool of India hosted a conference call on Feb 11, 2022. In the conference call the company was represented by Vishal Bhola, MD.

Key takeaways of the call

Last 2 years were impacted by covid.   Industry volumes in Q3FY22 were down 14%YoY to 4.6 million units on the back of very low pent up demand and rising inflation. 

Entry Segments Slow and to Come Back Post Covid -2. The entry segment demand was impacted as customers hold back due to impact of Covid and inflation etc but the Premium segment demand come back faster as the segment is replacement demand.  People hold back discretionary purchase in second half of last calendar year.

Confidence of entry segment demand rebound going forward  with the threat of Omnicorn declining before the peak summer season as well as cascading impact of strong Capex investment of about Rs 7.5 lakh crore which will boost the income of customers for entry segment. 

The company consistently grow ahead of the industry. The company have clear strategic roadmap in place to deliver profitable growth.

The company's market share is low in premium segment compared to higher market share at entry segment.  This relatively low market share in mid and premium segment offers strong head room for growth considering the strong product portfolio range the company can leverage from globally available within the Group.

Front load washing machine accounts for about 16-17% of the total washing machine market of the country and in this segment the market share of the company is just 1%. The company is expected to launch soon in latter part of FY22 the made in India front load washing machine. 

Even with in direct cool (DC) refrigerators there is entry, mid and premium segments. Mid and premium segment within DC has come back quick compared to entry.  Mid and premium the company play innovation leveraging technology. Scale is advantage for the company when there is industry volume.

Pricing to cover the inflation without losing market share.

Grown market share in last three months of last calendar year.

Overall market share is 15-20% gained market share year on year in the last 5 years. Entry is about 40% of the market with mid and premium is 60%.  The market share of the company in mid & premium segment has increased compared to FY20. The company has lost market share in entry and regained it.

On cooking segment elica built formidable distribution network.  On places where elica have not strong relationship as Whirlpool it can leverage the strong relationship of Whirlpool.  Similarly the Whirlpool cooking range can take advantage of cross/co sell.

The company has portfolio strategy to gain market share. Making sure in competitive at entry and play technology edge in mid and premium segment to gain market share.

Bulk of inflationary thing was passed via price increase while cutting down costs.  Efforts on improving efficiency on production front both direct and indirect coupled with come back of volumes are to facilitate margin to come back to historical levels.

All of ref and washers are locally manufactured. The component supplier has to set up shop here the component manufacturing is not the forte of the company.

Direct distribution reach currently is 70-72% of the potential.  The outlet presence is equal to the competition.

Margin was first impacted by Covid and later by lower volume due to absence of pent up demand as well as inflationary and higher ocean freight charges.

Cost production efficiency in both direct and in direct cost. Coupled with this initiative once the volume come back the margin will get back to historical levels.

Capacity utilisation of washing machines that was at about 85-90% in FY20 has declined to 75-80% and that of refrigerator was down to 60-70% as covid washed out the peak season demand last year. Intent to operate at 80% level. The company continue to debottleneck to improve efficiency and capacity.

Already investing in ac capacity where the market share is around 1% for the company.

Premiumisation opportunity available across the product categories for the company.

The company has gained market share in mid and premium segment of DC refrigerators in FY21.   Semi-automatic is evolving faster with local players gaining ground but over a period of time that will change as a different set of consumers will come back. 

Confident of gaining market share in DC and Semi-automatic washing machine.

Consumer database have 8 million records over the existence of the company. Besides collecting data it has developed tools to target right set of clients.