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.
|