Despite posting a 24.6 percent year-on-year decline in Q4 profit at Rs 63.7 crore, most brokerages have retained their Buy rating on Whirlpool India. At 10:30 am, the consumer durables stock was quoting at Rs 1,352 on the NSE, higher by 0.3 percent.
The company's revenue from operations has also fallen 2 percent to Rs 1,672.7 crore compared to same period last year. Sales were lower due to subdued market conditions and calibrated price correction actions.
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On the operating front, EBITDA fell 28.4 percent at Rs 105.6 crore and margins fell to 6.3 percent from 8.6 percent in the year-ago period.
The decline in performance has been attributed to muted market growth in Q4 especially in refrigerators and air conditioners driven by a weak summer and concomitant declining entry segment markets.
However, brokerages such as ICICI Securities and Yes Securities remain positive on the stock. They believe increase in revenue share of premium products and correction in input prices will result in better margins.
"We model Whirlpool to report revenue and PAT CAGRs of 15 percent and 37.1 percent over FY23-FY25E. Maintain BUY with a target price of Rs 1,600," as per ICICI Securities latest report.
Yes Securities is positive on Elica's growth. Elica reported a revenue of Rs 107.4 crore, up 11.6 percent YoY. Its EBITDA margin was 14.7 percent in Q4 FY23, up from 12.2 percent in Q4 FY22.
"On the ELICA front, recent portfolio expansion actions in the cooking category are yielding good results with Elica India revenue growing at double digits with healthy margins," noted Yes Securities. It has a Buy rating with a target of Rs 1,690.
However, Nuvama Institutional Equities believes the Street is 'overly optimistic in a weak market'. "We lower our FY24E/25E earnings per share by 11 percent/10 percent. The stock is expensive so we revise target to Rs 1,200 and downgrade to Reduce."
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