Analyzing...
ROOPALI SINGH
2024.08.06 17:12:34 +05'30'
Whirlpool of India Limited Q1 FY25 Earnings Conference Call August 01, 2024 Ladies and gentlemen, good day and welcome to the Earnings Conference Call of Whirlpool of India Limited. Wewishtoinformyouthatallparticipantlineswillbeinthelistenonly modeandtherewillbeanopportunityforyoutoaskquestionsafterthe presentation concludes. Should you need assistance during this conferencecall,pleasesignaltheoperatorbypressing“*”andthen“0”on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Roopali Singh, Company Secretary. Thank you and over to you ma’am. Thankyou.Goodevening,ladiesandgentlemen,averywarmwelcometo the Company's Financial Year 24-25 Quarter One First Earning Call. Today,IhavewithmeMr.NarasimhanEswar–ourManagingDirector, Mr. Aditya Jain – the Chief Financial Officer. A Presentation on the businessaswellasfinancialshasbeenupdatedonthecompanyandthe Stock Exchange website, you may pleaserefertothesameduringthe presentation. Before we move forward, I would like to inform you that there is a cautionary statement in the presentation, kindly take note of the contents of the same. With that, I would now hand it over to Mr. Narasimhan Eswar for an update on the business. Thankyou,Roopali.Andaverywarmwelcometoallofyou,ladiesand gentlemen.IamNarasimhanandIwilltakethefirst20-25minutesto walk through the business overview andourstrategicimperativesand ourprogressonthat.AndthenhanditovertomycolleagueAdityaJain, whoistheCFOtotalkaboutthefinancialperformance,afterwhichwe will take questions of course. Next slide please. We are now on Slide no. 6, which is the business overview.IfyoucanmovetoSlideno.6basically,Indiawehavecalledout the four as a strategic focus for the Whirlpool Corporation globally.A couple of things basically, thevaluecreationopportunityforWhirlpool and for all other appliance manufacturers in India is huge. And the reason is obviously the market GDP growth that we are seeing. Also combinedwiththefactthatappliancepenetrationisquitelow.So,you are talking about refrigerators, mid 30s washers, mid-teens, air conditioners less than 10%. And you have got a growing affluent Page1of27
demographic,whichasweknowtheboominguppermiddleclassandthe middle class in India. So, therefore, the opportunity for the durables businessitselfisverysignificant.Thenthequestioncomesastowhether Whirlpoolhastherighttosucceedwell,Whirlpoolhasgotatrackrecord ofvaluecreationinthiscountryandtalksaboutfourverycriticalthings thatithas.AsIhavesaidbefore,aWhirlpoolisplayedapioneeringrolein the Indian durables industry and has been associated with several industry first. I will cover these later. Whirlpool is a verywellreputed brand with great integrity, on quality and performance, straddling geographies. So, for example, North, East, West, South, all regions Whirlpoolisstrongandeconomicstrata.So,Whirlpoolhasgotproducts andconsumersinnotjustthepremiumend,butthepopularendaswell, themassmarketaswell,whereit'sgotitsstrengths.AndasIndiacomes back,strongerinthemassmarket,asitisinthepremiummarkettoday, Whirlpool will be very much there to reap the benefits of thatacross strata. Whirlpool has also got a diverse product portfolio as you know, we continue to innovateonpremiumproductsegmentsacrosscategories. This is particularly important because we are not just innovating on premiumsegmentsandfrostfreeorontoploadersorfrontloaders,you will see later in the presentation we are innovating very much on semi-automatic washing machines premium, as well as premium segmentintheDC,thedirectcoolrefrigeratorsaswell.Andwehavegota very strong manufacturing footprint, refrigerators and washers being madeinmultiplefactoriesinFaridabadandPuneandinPuducherryin India. And last but not the least, we have got a powerful pan India sales, distributionandservicenetworkandwehavealsogotexcellentrelations withourcustomers,combinedwithstronginvestmentsinbuildingretail and creating demand. So, those are the reasons why India is a great marketwewishyouverywellknowandwhyWhirlpoolwebelievehasgot a tremendous reason to succeed in India and therefore India isabig strategic focus to the Whirlpool Corporation. Moving on, let's take a look at the growth and profitability record of Whirlpool: So, very simply, I would like to call it out as a set of two big kind of intervalsandthenlatestyear.So,from2008-09to2019-20Whirlpoolhad arevenueCAGRof12%andaPBTCAGRof20%.Thosenumbers,Iwould takeanydayoftheweek,onaquickbasis,butthenfrom19-20onwards, wehadatoughertimewheretheresults,therevenueswerenotreally growingsignificantly.Andtheprofitscamedownaswell.Whatactually happened was, obviously COVID was a major factor, we also had significant competitive intensity coming in and you had significant regulatorychanges.Nowallofthese,withtheregulatorychangescame commoditycostincreases.So,allofthesebasicallyhittherevenueaswell astheprofits.Nowwhathappenedin‘23-24,intheyearthatjustfinished, very simply in ‘23-24 the revenue grew by about 2% and our profits basicallystayedataboutcloseto4%,3.9%,asopposedto4%oflastyear. Page2of27
So,thatwouldlookonthefaceofitlikenotalotofprogress.But,ifIwalk you to the next slide, Slide no. 8, really this ‘23-24FinancialYearwas basicallyataleoftwohalves.Inthefirsthalfoftheyear,asyoucansee, ontheleft-handside,therevenuegrowthyear-on-yearwas10%andin thefirsthalfoftheyear,weweredown(-4%).Andthisisbasicallydriven bypriceadjustmentsthatweneededtomakestrategicallyintheJanuary toAprilperiod.Andregulatorycostsaregoingup,whichhittheprofit. Thesecondhalfoftheyear,wehaveactuallygrownrevenueby10%.So, we have growndoubledigitsinthesecondhalfoftheyear,leadingto yearlyresultsofabout2%.So,itisactuallyataleoftwohalvesfroma revenue point of view. How does itlookfromagrossmarginpointof view, grossmargininthefirstpartoftheyeargrewbyabout60basis pointsfrom27.5%to28.1%.Andthenthesecondhalfoftheyearwent from 27.8% to 30.0%, which is 220 basis points. Now,thatwasdrivenbyalotofcostproductivityactions,wecallthisP4G, a“ProfitabilityforGrowth”,reallycomingintoactioninasignificantway,a very,verydeliberatestrategyandplanthatwedonowandwewillkeep doingintothefuture.Asaresult,ourprofitwhichinthefirsthalfofthe yearwas3.4%ofsales,whichwasactually(-29)versusthepreviousyear, sametimeperiod.Inthesecondhalftheprofitsgrewby58%versusthe previous year,withthePBTpercentgoingupto4.5%.So,thefullyear revenue growth and profits actually benefited from the positive momentum in the second half of 2024. Nowallthat'swellandgood,buthowarewedoinginApriltoJune.So, really,ifyougotoSlideno.9,wearehappythatwearesustainingthe momentum through April and June. Revenue growth of standalone businessis24%versuslastyear.PBTgrowthis128%versuslastyear,so weareveryhappythatourstrategyofprofitablemarketsharegrowthis clearly working. What I think makes us happiest is that we have had strong share gains intripledigitsbasispointsversuslastyear,inboth refrigerators, and washers. So, it's not one or the other, both refrigeratorsandwashers,wehavehadverystrongsharegainsintriple digits basis points. We were also helped by notjustthemarketshare growth,butalsoastronggrowthintherefrigeratorindustry.So,aftera longperiod,April,May,Junehasbeenaperiodinwhichtherefrigerator industryactuallygrewstrongdoubledigits,washersdidn't.Butthat'sfair becauseboththerefrigeratorsandtheACmarketreallygrewmassively. Andwearemuch,muchmorepresentinrefrigeratorsandwithamuch smallershareinairconditioners.So,ourbenefitreallywasfromtheref marketgrowth.Washersmarketgrowthnotreally.So,acombinationof sharegaininrefsandwashersandstronggrowthinrefandACiswhat actually got us those results. Basicallysee,wewereabletogrowthemarketshareprofitably,whichas I explained to you last time, is always the impact. The results have actually come based on a very, very disciplined ROI-based investment strategy.So,wearecalculatingwhatwedo,whatwecouldn’t,andwhat wegetoutofthingsbasically,quiterigorously.Andthatisthebasison whichweinvest,andwehavecalledoutveryclearly,wehaveidentified forourselves,whatarethegrowthlevers,whatisthemagnitudeofthe Page3of27
growth lever, what is the momentum of that growthlever,howmuch runwaydoesthegrowthleverhaveandthereforehowlongcanwekeep focusing on it. Where we are confident about the growth leverforall thesefactorsmentioned,weinvestfearlessly,wherewearenotverysure wemakesurethatwelearn,andweassesstheROIbeforewerollitout. So, that is basically the strategy that we are following. Excuse Me! If you look at the profitability, it's not just coming from our top line growth, but it's also coming from significant gross margin and bottom-line improvement, which comes from the “Productivity of Growth”program,whichisthecosttakeoutprogramthatleadstothis gross margin improvement. We arealsoquitehappythatnotonlythe salesandtheprofitsaregoingintherightdirection,butoperationallywe havealsobeenabletomakesurethatwefocusoninventoryreceivables andpayablesaswell.Withtheresultinourcashpositionisatabout485 croresthatwehavegenerated.So,wearequitehappyaboutthataswell. So,thesearethenumberspresentedforyou,revenueisat2384crores year-on-yearchange24%.Drivenbystrongmarketshareimprovements inrefandwashersversuslastyear,andastrongdouble-digitgrowthin refs,aswellasinairconditionerindustry.Boththerefrigeratorsandthe washersbusinesshavegrownbyhighdoubledigitsforus,whichisthe othernotablepart.So,wearenotcountingonlyonmarketgrowthasI said many times before, we are counting on growing to share. EBITDA and PBT improvement is being driven by the volume growth, which obviously helps our industry a lot, but also by a lot of cost productivityactionsacrosseverylineoftheP&LinthisP4Gprogramthat leads to better margins and improved mix. We have also focused on drivingthemixalot,whetheritbethroughourmarketingstrategiesorit bethroughincentivizationofthesaleforceincentives.Andthatseemsto beworkingwellaswell.So,thoughwehavehadthepriceimpactsand theregulatoryimpacts,thesethingsarehelpingus,youknow,gettoa better position.AndcashflowobviouslyderivesfromastrongEBITDA, but alsoasignificantimprovementintheworkingcapitalthatwehave been able to drive. Nextslide,please.IgotoSlide#11,thisistheonethatIam,asateamwe arehappiestabout.Andwereallyhopewecankeepthisup.So,thisis going to be the cornerstone. If we can keep this up this will be a wonderfulstoryforus.JustwalkyouthroughOctober‘22,toMarch‘23. So,there'sachronologicaltimelinethatexplainswhathashappenedto our business, October ‘22 to March ‘23, the market was growing mid-single digits, we had a significant problem, because the volume market share was declining quite substantially, triple digit bps. It was impactedalotbyseveralissues,competition,etceteraabutthebiggest one was price Index challenges. So, we corrected this price index challenge around Jan toAprilof2024,ohsorry,of2023.Andwealso introducedthenewdirectcoolrangesinJantoMarchof2023.Despite that the volume market share though improve it was still declining versusayearago,ifyougotoApriltoSeptember,whichisthenexttime period, themarketwasactuallyflat,whatwewereabletodois,really stepupourfocusonexecutionofmarketing,executionofsupplychain, Page4of27
executionofsales.Andwealsointroducedthefrost-freerangesfullyin ourstores.Andtheseincrediblerangeswherewehavebetweenthe265 litersandthe360liters,wehavegotclaimslikeconversefromfreezeto fridgeinjust22minutes,whichisbestinclass claiminthemarket.So, completely new technology that we brought in and there was an improvementinthemarketshareversustheprevioustrend.Butwewere stillkindofslightlydecliningversusayearago.October‘23toDecember ‘23thatquarter,themarketitselfgrewbyverylowsingledigits.Butwe haddeployedsomeincrementalretailexecutivesinthefield.Theyhad comeofage,inamatterofspeakingintermsoftheirexperience,andso onandsoforth.Andwestartedthemixdriveandrightearnest,along with some tests that we were doing in certain areas. And we started seeing the market share grow versus the year ago. JantoMarch‘24,wasaperiodofsignificantconsolidationofmarketshare growth. Continuing onthegrowthmomentum,thoughthemarketwas flat, we had a significant impactofallourROIbasedinvestments,our newproducts,butalsoourexecutionofstepups.Andtherefore,youcan seethatvolumemarketshareincreasingyear-on-yearquitesignificantly. Andnowwearetalkingbothrefrigeratorsandwashers.AndlastlyAprilto May 24 the market itself finally grew double digits, which was very welcome.Butatthesametime,thefulleffectofourretailexecutivesthat wehaveaddedacrosstime,thenewproductsthatwehavebroughtin, the clear focusonmixeddrive,thechangeofthesalesforceincentive plan,andmany,manyotherchangesthatwehavedoneincludingmajor programs with the customers and so on and soforth,hasledtothat tripledigitgrowthinbasispointsinmarketshareforbothrefsandfor washers. So,ifIthenmoveonveryquicklytoElica.Elicacontinuestodowell,we haveincreasedourownershipinElica,asyouknowfrom49%to87%,in 2021,verystrongcapabilitiesandlocalmanufacturing.AndElica,Iwould callasapioneeroraninnovatorinthisspaceintermsofcomingupwith real quality products, great technology, good distribution, good brand awareness,butstillopportunitiestogrowinbothdistributionandbrand awareness, which augurs well because this market is also a very low penetration market. And we believe that Elica is going to be a great long-termplayer.WehavealsoestablishedWhirlpoolasamasspremium cookingbrandalongwithElica.Ifyoulookatourrevenuesandmargins, thegrowthhasbeenprettysignificantacrossthelastthreeyears,double digitCAGRwithstrongmargins.Obviously,themarginsoperatebetween 13.5 to about 17.5%, 17.5 being thepeakin‘23-24butIwouldexpect ongoingbasis,themarginstobemorebetweenthe15%to16%kindof range, as we seek to invest to drive this wonderful business. Next,please.So,Imoveonnowtothestrategicimperativesthatwehave. So,whatarethestrategiesthatwearefollowingasanimperativetodrive ourbusinessandtherearefivebasically,andIhavespokentoyouabout this,inspiringconsumersandgenerationsofconsumerswithourbrands. Second is winning with product leadership. The third is building a competitiveandresilientsupplychain,thefourth,myfavoriteexcellence Page5of27
inexecution,andthefifthisgrowingaconsumerdirectbusiness.So,let's take a look at it one by one. So,ifyoulookatournextslide,please.Slideno.15.Inspiringwithour brands we look at our history inspiring consumers with our brands. Whirlpool asyouknowwasthefirstintroducedpedestalsinDCinthis country,whichisnowasignificantproportionoftheentireDCbusiness, not just Whirlpool’s business. Whirlpool was the first to bring in auto defrost technology, and still remains the largest by far player of auto defrostinthecountry.WhirlpoolwasoneoftheearlypioneersinCFM andcolorsandfinishesbasically.Butit'snotjustDC,Whirlpoolwasthe first to bring in the three-door refrigerator intoIndiawiththeprotton series which continues to do very well. It also brought in the Platina range,whichisdarkinteriors,andinwashersWhirlpoolintroducednot just the incredible Bloom Wash 360, which is our top, let's say most premiumtoploaderbutalsothefirsttoploadingheaterinthecountry, which we now have across quite a bit of our top load range. So, in essence, this iswhatItoldyouaboutearlier,Whirlpoolisapioneerin India's durables industry, in inspiring trust for consumers with our brands. Now,howareweactuallybringingittolifenow,goingtothenextslide. Wearevery,veryproudandhappytoworkwithoneofthegreatIndian company, a company that I have always admired, Unilever. We have announcedastrategiccollaborationonthe12th ofJunethatwedowith Unilever.So,WhirlpoolandHULhavedecidedtocollaboratetoenhance theIndianconsumer'slaundryexperience.Andthewholelogicisavery, very simple logic, which is, penetration is a massive opportunity for washing machines in this country. And penetration is also a massive opportunityforliquiddetergentsandwashingmachinesinthiscountry. Thatis,inessencetheopportunitythatwesee,thisopportunitycantake severalforms.Atthispointintime,wemadeagrandstartwithajoint media campaign, a TV and digital, which is a co-branded campaign betweenWhirlpoolandSurfExcel.Iapologize,Iamnotabletoplaythis foryoubecauseit'sanaudiocall.Butthelinkhasbeensentalongwith thevideowhichyoucanlookatleisure.It'sanadvertthatwereallylove. And I am suretheUnileverguyslikeitaswell.Myfather,wholivesin Chennai,hasreportedseeingitseveraltimes.Heismypeopleleader,you knowliterallyhemonitorsandthenletsmeknoweverytimeheseesthe ad, and I believe that he's seen it a reasonable number of times. We also are doing, sorry, please go back please, we are also doing samplingandOnPackendorsementsonboththemachinesaswellasthe productsofUnileverSurfExcel,whichisthebrandsofExcelMatic,which isabrandthatweareworkingwith.So,atthispointintime,it'smedia, it'ssampling,it'sOnPackendorsement,andplentyofopportunitytodo much more in this areatodrivepenetrationinwashingmachinesand liquid detergents. Nextslide,please.Butthat'snotall,wearetakinginspiringtrusttothe nextlevel,becausewejustsaidwehavegotamazingproductsonboth semi-automaticaswellasfrontload.Andwehavegotopportunitiesto Page6of27
improveourmarketshareinboththeseplaces.Wetookalookatthese productsandsaid,wearesoconfidentoftheseproducts,let'sputour moneywhereourmouthis.So,wehavemovedfirstfromofferingtwo yearsofcomprehensivewarrantyonsemi-automaticmachinesfromtwo years to four years in January this year. So, on every semi-automatic washingmachinethatwemakeandsellinIndia,webasicallygivefour yearswarrantyonWhirlpool.Andfollowingthesuccessofthatprogram, we have offeredafive-yearcomprehensivewarrantyonourfrontload fullyautomaticwashers.Thisisthenewlinethatwesetupin2022,which isdoingreally wellandtheproductsarefantastic.So,wesaidalright,so let's offer, you know, that trust to the consumers to say this is how confidentweareinourproductthatwearewillingtogiveyoufiveyears ofcomprehensivewarranty.AndthatissomethingthatwedidfromApril this year. So, those two are in the market and we look forward to significant and continued growth from these. IfImoveontothenextone,whichisproductleadership.Wehavedone somenewproductlauncheswearevery,veryproudof.Nowboththese product launches have been done in the space of the last 12 to 14 months, basically. So, that's been great work by the team to bring commercialinnovationtomarketsoquickly.ThefirstoneistheDCglass door,thedirectcoolrefrigerators,thesingledoorrefrigerators,theglass doorrage,asyoucansee,afantasticnewdesigns,theylookstunningin thestore.Andrightnowwearenotabletoproduceenoughtomeetthe demand.Andso,Ihopethatcontinuesandwehopetocontinuegaining thebenefitsfromthis,butalsoabletoprovidetheproductswhereverit's neededbytheconsumers.So,thisisthefirstoneandthenmovingon. This is something that we are inordinately proud of semi-automatic washingmachinesisonethingthateverybodywouldthinktheonlyway tokindofgrowthisbusinessisjustbringinmorecapacity,7kgto8kg,to 9kg,to10kg,to11kg,yesthat'sonewayandwewillfollowthataswell. Butwhatwehavedoneis,wehaveboughtinapremiumofferinginto semi-automatic washingmachinesbylookingatthesinglebiggestpain point for semi-automatic washing machine users, which is detergent patchesifyouseetheleftsideofthescreen,ontheblueshirt,yousee thosepatches,itsayswithoutdynamics.That'sthekindofpatchthatyou cangetasaconsumerwhendetergentandwaterdon'tmixproperlyin semi-automaticwashingmachines.Butwhatwehavebeenabletodois come up with a technology called the dynamics technology where hydrodynamic fins in a compartment, mix the detergent with water ensuringnodetergentcoagulationandofferinganincredibleexperience, right,zerodetergentpatches,zero,okay.Weareincrediblyproudofthis initiative that we brought tomarketandthishasjusthitthemarketa couple of months ago and we look forward to driving this really hard. Moveonplease.Thenextslide,Slideno.20.Elicacontinuestodazzlewith itsinnovativeranges.Theoneontheleftisaparticularfavoriteofmine. TheautosensechimneysthatwehavebroughtinwiththebrushlessDC motors.Seetheinsighthere,againtheconsumerinsighthereinspiring trust we talked about. Consumer insight here is that, when yougeta chimney,youoftenandIamsureyouhaveexperiencedwithyourselfat home, youoftenforgettoturnonthechimneywhenyouarecooking. Page7of27
Andsoyouenduphavingthis,smokeintheroomforabout15minutes, andthenyouswitchiton,butbythenyoureyesarewatering.Lookat these incredible auto sense chimneys, what they do is this, there's a thermalsensor,thatassoonastheflamecomeson,itdetectstheflame, anditcomesonautomatically.Nowthat'sagreatconsumerbenefitand ontheright-handside,youseetheHexaIndLotusseriesofhobs,there aretripleburnershere.Andthesehaveheatshields.So,ifyouseethose heatshieldsthatyoucanseeonthescreen,thatavoidsyourknobsfrom heating,justimaginesuchthoughtfulnessthat'sgoneintothedesignof these products, heavy duty burners, and obviously looking incredibly good, world class design. So, that’s on that. MoveontothenextSlideno.21.Wetalkaboutexcellenceinexecution likeIsaid,youcandoalotofstrategybutifyourexecutionisnotbrilliant, thentheconsumerdoesn'tgettoseeyourstrategy.Wearefocusingonit iswithrespecttosalesandservicewinningeverydayineverystorewith everyconsumer,howdowedothat?Wehavebroughtinmuchstronger visibility,whichwetrackofthepremiumlinesandournewrangesthat webringintothemarket,focusingmoreonpremium.Second,wemake sure that we get our pricing strategy right,especiallyonthepremium lines,wherethereisanopportunityforustogrowmuch,muchmore,we havegotgreatproducts,maybenotenoughmarketshareascompared toourpopularranges,andthereforeagreatopportunity.Wehavereally gotmuchstrongersalesandserviceexecution,includinglikeImentioned incentiveplansthatdrivepremiumization,thatdrivestherightmix,that drives value at the consumer level, basically at the market level. Andthenwealsoleverageourgreatcustomerrelationshipsthatwebuilt upoverthreedecades,roundafterroundofmanagementhasbasically engagedwithourcustomerpartnerstodevelopgreatrelationshipsand weleveragethataswell.Andofcourse,wecontinuetodrivee-commerce marketing.IfIlookattheservicepart,it'saverygoodstory,youcansee fromthatgraphthere,theNPSorthenetpromoterscorethatweget, whichisbasicallyconsumerscoreratingusonhowtheyfeltaboutthe installationortheservicing.Thescorescontinuetogoupquitestrongly. Andwedothatthroughavarietyofthings,wehavegotdifferentiatedcall centers,wehavegotdedicateddesksforpremiumcustomers,forthetop 20cities,wehavegotescalationdesks,weusetechnologylikeWhatsApp, API's,videocalling,etceteratoservicetheconsumer.Andwehavealso gotin-houseservicecentersthatwesetupin2022,thatnotonlydrivean excellentserviceexperience,butactuallyarefinanciallyviable.So,allin all, from our service and a salespointofview,wearehappywiththe progressthatwearemaking,weneedtodomuchmoreofthis.Butwe are happy with the progress that we are making. Nextslide,please.Slideno.22,wearecomingtotheendofmypiece,is basicallytwobigthingstohighlightonthesupplierexcellenceprogram. Firstofall,wearevery,veryproudthatallourthreemanufacturingsites Puducherry,PuneandFaridabadhaveachievedthebronzeinworldclass manufacturing,whichasyouknowisnotaveryeasythingtodo,very, very proud of that. And the other thing is that, Imentionedprobably aboutsixorseventimesinthiscalltheP4Gcostleadershipprogramthat Page8of27
wedoacrossalllineswiththeP&L,productivitytogrow.So,thewhole idea is to save money across all lines of the P&L, put some into the bottom line, put some back into the business, todrivemarketingand salessothatyoucandrivethevolume.Andthereisasignificantstepup that we have done on that. I would say that is very, very important, especially given that going forward, there are going to be commodity headwindsthatweknow,therearegoingtobeoceanfreightheadwinds that arealreadyhappeningwhichthewholeindustryissufferingfrom. Andthesechallengesaregoingtobeaheadofusfromacostpointof view.ButwecontinuetodriveourP4Gprogrambecausethat'sinaway forusalittlebitofanantidotetothesekindsofissues.So,withthat,Iam going to hand over to Aditya, the CFO for the financial performance. Thankyou,Mr.Eswar.Again,awarmwelcometoeverybodyonthecall.I am on Slide #24. And I will talk about the financial performance of Whirlpool of India.Thisslidetalksaboutthestandaloneresultsforfull year‘23-24.Wedeliveredatoplineof6333crores,ourfullyearrevenue was up 2% this was despite the industry was soft, weak summers, especially on the ref side of thebusiness.Andinthesecondhalf,our revenuewasupby10%,whichwasdrivenbymarketshareledgrowth, whichwasinturndrivenbystrongerexecution,andeffectsofproduct upgradesandinnovation.Thiswasincontrasttoourfirsthalfdeclinein revenueof4%.Ifyoujustlookatfromtwocorecategoriesforourselves, therefrigeratorsgrewinlowsingledigitsandthewashersforafullyear point of view grew in double digits. Comingtoprofits,theEBITDA,wedeliveredanEBITDAof312croresat 4.9%. EBITDA grew by 4.6% on a Y-o-Y basis and on profit beforetax before exceptional items we delivered a profit of 250 crores at 3.9%. Actually, wearrestedthethree-yeardeclineinprofits.So,overthelast threeyearsbecauseofCOVIDcompetitionandcosts,wesawadeclinein profit.Butthiswastheyearwesawthatarrest,wearrestedthedecline, andtheprofitsgrewmarginallyby1%year-over-year.Justtogivealittle bitofcolorontheprofits,theprofitsinthefirsthalfwereimpactedbythe price adjustments which were forced to take to correct our competitiveness in the marketplace. And the significant impact of the regulatory cost changes which happened which impacted our cost. However, in the secondhalf,becauseofthesignificantvolumegrowth andthecostproductivityactionswhichwetookalsoheldbythesoftening of the commodity prices and all the actions which is the ROI based investmentwhichMr.Eswarspokeabout,andthefocusondrivingmix hadledtoa58%growthinprofitinthebackhalfoftheyear,ultimately leading to a full year profit growth of 1.4%. Onthecashside,wegenerated535croresofcashinfullyear‘23-24.Cash wasdrivenbyobviouslyEBITDAaswellastheimprovementinworking capital. Improvement in working capital was led predominantlybythe inventorymanagement,therewasanorganization-wideefforttoimprove the quality of inventories and reduce slow moving, non-moving and obsoletestock,whichwasbasicallyapaidinventoryforusandasaresult ofwhichwesawanimprovementinworkingcapitalandhencethecash generation. Page9of27
On Slide #25, this is the, this slide talks about the financials on a consolidatedbasis.Thedifferenceversusthelastslideandthisslideis abouttheElicaperformance.Onafullyearbasis,wedeliveredarevenue of 6830 crores, our revenue was up 2.4%. We already spoke about standalone business. On the cooking side Elica grew revenue in high single digits, so Elica revenue grew by about 8%. On profit side,ona consolidated basis the highlight is that, we grew profits in highsingle digits. Both EBITDA and PBT grew by about 8.8% and 9.8% and Elica continuesitsgoodstrengthandprofitabilityandprofitforElicabusiness grew40%Y-o-Yandonaconsolidatedbasis,wegenerated610croresof cash again driven by EBITDA and strong working capitalimprovement versus last year. Moving to Slide #26. This talks about the quarter one financial performancewhileMr.Eswarspokeaboutthestandaloneperformance, so hence I am covering the consolidated performance which includes Elica.Fromatoplinepointofview,wedeliveredrevenueof2497crores.I amhappytostatethatthisisthehighesteverrevenuewehaveclockedin anyquarterinthefinancialyear.Andthisisagrowthof22.5%versuslast year. This revenue growth was driven by strong market share improvementonthebackofvariousactions.Wehavetakenaroundthe strategicimperativesalsoheldbythedouble-digitgrowthinrefrigerators aswellasairconindustry.Apointworthhighlightingbothrefrigerators and washers grew inhighdoubledigitsforus.EBITDA,wedelivereda consolidatedEBITDAof211croresat8.4%.EBITDAgrewby71%lastyear andtherewasanimprovementof230basispointsandprofitcameinat 196croresthatwasalmostdoubleversuslastyear,andPBTpercentage was 7.8% and an improvement of 300 basis points versus last year. Abitcoloronprofitability.So,bothEBITDAandprofitimprovementwere driven(A)bythestrongvolumegrowth.Wesaw22.5% growthintopline whichautomaticallytranslatestoasignificantimprovementinDCM,fixed cost remaining flat everything flows into the bottom line, plus a significantimprovementalsocamefromthecostproductivityactions.A lot of work happened on the commercial negotiation and technical productivity, so the market forces of commoditieswereflattishversus last year. ButallinternaleffortsoncostandtheP4Gactionledtothe margins improvement coupled with the entire focus ondrivingmixof high DCM and premium portfolio to business and this has helped us offset the pricingchallengesandtheregulatorycostimpactswhichwe had. Onthecashsideonaconsolidatedbasisthatremainsagoodstory.The efforts on managing working capital inventory and the accounts receivable remains and in this quarter we generated a healthy on a consolidatedbasisacashof491crores,whichissignificantlyhigherthan lastyear.Withthis,IhavecoveredthefinancialperformanceandIwill pass it back to Ms. Roopali. ThankyouAditya.IwouldtakeanopportunitytothankbothMr.Eswar and Mr. Jain for such a detailed presentation. I would now hand the proceedings back to the moderator to open up the Q&A session. Page10of27
ThankyouRoopali.Wewillnowstartthequestion-and-answersession. Participantspresentontheaudiobridgewhowishtoaskquestionsmay press * and 1 on their touch tone telephone. If you wish to remove yourselffromthequestionqueue,youmaypress*and2.Forclarityof questions and better audio experience, participants are requested to ensurethatwhileaskingquestions,theyareusingheadphonestoavoid the backgroundnoise.Intheinterestoftime,wesincerelyrequestthe participants to limit their questions to two. We will now begin the questionandanswersession.Thefirstquestioncomesfromthelineof Aniruddha Joshi from ICICI Securities. Please go ahead. AniruddhaJoshi: Sir,twoquestionsfrommyside,inthepreviousconferencecallyouhad indicated the revenue guidance in highsingledigits.Butnowwehave seen a very strong performance in quarter one. So, will there be any changeintheguidanceandifyoucanindicatetherevisedguidancethat you are looking at, that is question number one. And then question number two is, whilethecompanyhasgainmarketshareisthereany strategywithwhichthecompanyisworkingintermsofgainingmarket share,forexample1%marketsharegaineachyearormarketsharegains in premium end of the market or anything that you would like to elaborate and what will be the key triggers to drivethemarketshare growth,isitthedistributioninyourregionsorgainingmarketsharein theexistingregionsitselforlaunchofnewproductsorinawaypricecuts or aggressiveadspend.So,justwantedmoreclarificationanddataon thisfromyou.That'sitfrommyside,thankyou.Andcongratsforgreat set of numbers. Thank you Aniruddha, much appreciate I kind of knew this question would come. Well, I would say that we are not giving any guidance, etceteraforthefullyear.WhatIcanassureyouisthat,investorswithus,I canassureyouthatweareputtingineveryefforttomakesurethatwe trytomeetyourexpectationsandthat'saboutthemaximumguidanceI cangive.Asyouknowwearealistedcompanyhere,alistedcompanyin theUS.Idon'twanttotalktoomuchaboutguidancethatwehavenot givenelsewhere.So,wehavedone,Ithink wehavehadaverygoodfirst quarter. You know, everything depends on thegrowthactuallyforthe year depends onacoupleofthingswithrespecttotherevenue,right. First, it depends on the market, which is very difficulttopredictwhat happenstothemarket.Secondisyourmarketshare,sothosearethe two things that basically help to go towards your inorganic business growth.Whilemarketisverydifficulttopredictwhatwillhappenornot happen,ourfocuswillbetotrytokeepourmarketsharestrong.Because attheendoftheday,profitablemarketsharegrowthisactuallywhatasI saidlasttime,iswhatwewanttofocuson.So,growingmarketsharebut growing profits atthesametime,theintentisnottogrowthemarket shareanddroptheprofits,becausethat'snotasustainablemodelinour view. Now, the second part ofthequestionIcananswerinalittlebitmore detail, which ishowdowelookatgainingmarketshare.Whatarethe triggersdrivingthemarketshare?So,firstly,thekeyformewouldbeto drive marketshareprofitably,whichbasicallymeansifIgrowrevenue, Page11of27
ideally,Ishouldbegrowingprofitsaheadofrevenue.Thatistheintent, there could be quarters in which we are not able to dothat.Butthe intentwouldbetodothatallthetime.right.ThatiswhatIwouldsaya good company does. There are many triggers, you know muchbetter than me. The obviously new productsandinnovationisobviouslyone greattrigger.Therightpricingfortherightproductisanothertrigger.All of the sales fundamentals and execution youcalledaboutdistribution beingavailableinmorestores,butyoucanalsoimagineextractionwhich isbasicallytakingoutmorevolumefromthesamestore,fromthesame numberofdisplaysthatyouhaveinthestore.So,yourdisplayshareis also adriver.Yourdifferentcategoriescanbedrivers,somecategories growing faster than the others, thelowerpenetratedcategorieswhich have momentum growingfasterthantheothercanalsobesomething that grows. Within this obviously we try to driveourpremiummarket shareharderthanourlet'ssaypopularforlackofabetterwordmarket share the entry level products,butofcoursesometimestheseasonis great,theentrylevelmarketsharewillgoupsothat'sokay.So,longas your premium market shares are going in therightdirectionthatyou wantitto,therearetimesgiventheIndianmarketwheretheentrylevel segmentreallygrowsverywellandbeingaleadingplayer,yourmarket sharegrowsfaster,youwillendupwithanentrymarketsharegrowth fasterthanyourpremiummarketshare.weareokaywiththat,solongas wearegrowinginpremium.So,ourstrategywouldbeexactlywhatyou called out, which is driving all these levers havingaveryclearideaof which lever to use when, having a very clear focus on return on investment ineachoftheselevers,becauseasyoucanimagine,Ionly detailsomeofthesalesandmarketinglevers,therearemanyofthem, right.So,wearetryingourlevelbesttodothisinascientificandrational way.So,thatwecanalwaystrytogettoourgoalofprofitablemarket share. I hope, I answered your question. AniruddhaJoshi: Yes,manythanksforthat.JustthelastquestionandthenIwillcomeback inthequeue.Weareseeing,e-commerceisbecomingawaymajorforce intheentireconsumptionbasket,especiallyinwhitegoodsanddurables also,nowwithONDCplatformalsobecomingabitbigger.So,innext10 years this will be likely to be a major driving force in the entire distribution.So,whatarethestrategiesofWhirlpool,inthisentirething andwhatarethemarketsharesine-commerceplatform,comparedto let'ssay,GTorMT,Idon'twanttheexactnumber,butaretheyhigheror materially higher or lower or materially lower, anything directionally would be very helpful. That's it and thanks from my side. No,thanksalotAniruddha.So,toansweryourquestionone-commerce, wellweobviouslywearepresentonallthethingsthatyoumentioned, wearepresentonthekeye-commerceplatforms,wearealsopresenton ONDCsinceendoflastyear,likeyourightlysayitisgrowing,anditwill continuetogrowonanongoingbasis.Ithink,thewaywelookatthisis that,wedon'twanttofavoranyonesegmentorplatformatall.Theseare justdifferentwaysofreachingourconsumer.Right!Andwealsoinclude inthisourownD2Cbusinessasyourecall,wehavecalledthatoutalsoas a strategic focus going forward. And that's something that we will continue to introduce going forward as well. We already have a D2C Page12of27
website and a platform. So, to answer your question, yes, very much e-commerceispartoftheplan.Wehaveno,let'ssayaimtogrosslydrive onechannelversustheotherabsolutelynot.Weplantobasicallydriveall thechannelswithrespecttothefinancialreturnthatwegetoutofthe channel, and also the long term ability for that channel to kind of contributetotheindustryandcontributetoourgrowth,right.So,thatis thebasisonwhichwemakeourinvestments.Andwecontinuetomake investmentsinbothe-commerceandinD2C,includingONDC.Nowthat's the first part of your question. Inthesecondpartofthequestion,themarketsharesarekindofpretty much,muchofamuchless,it'sverydifficultformetogiveyouanexact idea. The reason is because the numbers are slightly different across different,butIwouldsayit'smoreorlessinthesameballpark.So,it'snot likewearemassivelybelowinoneversustheother.It'smoreorlessin thesameballparkbetweene-commerceandtraditionaltrade,whichalso showsthatlikeItoldyoubefore,thisbrandstraddlesgeographicstrata,it straddles premiumandpopular,itstraddlesdifferentchannels,itdoes pretty well across the board. Aniruddha Joshi: Okay, Thank You, Thanks Alot. Thank you. The next question comes from the lineofPriyankChheda from Vallam Capital. Please go ahead. Ya,HiTeam,Congratulationsforgreatsetofnumbers.Sir,myquestionis onthegrossmargin,particularlyfortheJunequarterwhichwesaw,itis seasonally strong for refrigerator,butweareseeingseasonallyslightly lowerthanwhatweseefortherestoftheninemonths.So,isrefrigerator a lower margin business versuswasheronarelativebasis,ifyesthen why. (B), how should we think when it comes to the full year gross margins after all the price corrections that we have taken, vendor negotiationsaregettinginitiated.So,whereshouldweendgrossmargins for the full year and on the P4Gprogram,ifyoucantalk,ifthereare additionalsavingsleftbelowgrossmargin,whichisfreight,employment, employeecostoradvertisements,isthereanythingthatweshouldthink, weshouldapproveinthisyearbelowgrossmarginasasavings.That'son my side first question? ThanksPriyank,thisisAdityaandIwillpickupthisquestion.A,firstthing Ijustwanttosaythatbecausewearealistedcompanyandwearenot givingshorttermguidancessoIwon'texactlybeabletotellyoulikehow willmyfullyeargrossmarginwilllooklikeetcetera,etcetera.Havingsaid that,tothequestiononwhetherrefversuswashers,arethemarginsare significantly different. So, not significantly different, both of them are ballpark in the same range.So,itisnotthatoneissignificantlybetter than the others. In this quarter, we have seen a year-over-year improvementingrossmarginspredominantlycomingfromthebenefitof the productivityactions.Andhence,youseeroughlyoneandahalfto twopercentagepointsimprovementcomingfromthematerialcostline. Page13of27
So,aswehaveexplained,wehaveaverystructuredP4Gprogram,there areteamsbothoncommercialnegotiationsidesand,andthetechnical side whoworkondrivingthoseproductivityinitiativesforustodeliver thosecostsavingsapartfromwhateverhappensonthecommodityside inthemarket.Toyourpointsonlineitemsbelowmaterialcostwhichis youremployeecostandallotherexpenses.WealsohaveaP4Gprogram inwhichwecapturetheindirectcost,whilethematerialcostisadirect cost.Butwealsocaptureindirectcost,andtheteamsareworkingonit. The idea is not here to cut the cost, but open cost optimization asa principlethathowcanwegetmorefromthesamelevelofcostsorhow canwedothesamelevelofworkatalowercostprinciple.So,thereare teamsworkingoneachofthelineitems,butthenmaterialcostbeinga significantpartoftheP&Landroughly70%ofthecostismaterialcostis theentireP&L.Hence,that'swhereyouwillseethebiggestamountof productivity, which is reflected in the P&L. Perfect-Perfect. Coming to theseason,whichisforthewashers.Ifyou canelaborateoverallstrategyfortheseason,whichhasalreadystarted, howdoyouseeindustrygrowthpanningout,giventhestrongmonsoons andweareslightlyweakonthefrontloadsideasfarastheoldcategory goes. So, how arewebridgingtheoverallportfolio,makingtheoverall portfolioreadytogainthemaximumoutofthecurrentongoingseason andifyoucanalsoelaborateonthiswasherasacategorywhichhasseen a solid competition coming up from the entry level peers like Voltas, Beko, how is the overall competitive intensity panning out for you, particularly for the washers. Thank you. That's a great question. I will trytoansweritasbestasIcanwithout revealingtoomuchbecauseasyoucanimagine,wearealistedcompany andsomeofourcompetitorsarenot.So,Iwouldbeabsolutelyloathto giveoutanyinformationthatwouldprejudiceusinthemarketplace.How doIseethewasherseasoncomingthrough,veryfranklylikeIsaid,right at the beginning very difficult topredict.IwishIcouldpredictitandI wouldsharethatwithyoubecauseitwouldbehelpfulformeaswell.But it's very, very difficulttopredicthowthewasherseasoncouldbe.The summerseasonwasbetterthanwhatanybodyexpected.Thebestofthe best did not expect that this good summer season, especially for air conditioners.Andso,Iamonlyhopingthatthewasherseasonisgood, buttobehonest,likeIsaidwhatwefocusonistryingtofocusonmarket share,so,thatwecanbesure,ifyourmarketsharegrows,youcanbe sure of at least some of your growth. If you are counting on market growth, that can be in the short run a little bit of a misleading thing becauseifitdoesn'tcomethenyouareinasoup.So,everythingthatwe doisbasedontryingtodrivemarketshare,likeIsaidprofitably.So,we basicallygotthreebusinesses,whichisfrontloadbusiness,ourtopload businessandoursemi-automaticwashingmachinebusiness.SoIthink, you have talked about competition,notgoingtogointowhichbrands andsoonandsoforth.Butyesitisquitecompetitiveandthat'sgreat, becauseit'sgoodfortheconsumerswhenit'scompetitive.Wewelcome thecompetition,it'sveryinspiringforus.So,wehavespecialplansforthe washerseason,youwillseeitinthemarket.Wehavealreadytakensome actionsactually,tobehonest,Idon'twanttosayonthecall.Butifyou Page14of27
actually make some inquiries inthemarket,youwillalreadyknowthe actionswehavetakenonsemi-automatic,youwillknowtheactions.For example,Ialreadyspoketoyouaboutonethingonfrontloadingthatyou asked about, that we have actuallygonetoafiveyearcomprehensive warrantyonthefrontloadwashingmachines.So,fantasticnewproducts withafiveyearfrontloadwashingmachine.Ifyoulookatourtopload business,whichisbasicallythetoploadverticalaxismachines,wehave justgotadvertisingonaftermanyyearswiththeUnileverWhirlpoolad.If you see that ad, you will see that what is featured in the ad is the bloomwash series,whichisourflagshipproductintoploaders.Andin semi-automatic washing machines, which is historically been a big success for us, but of late has been somethinginwhichwehavehad somechallengesinshare,wehavetakenacoupleofsteps,wehavetaken somecorrectionsinpricingthatshouldhelpusthroughtheseason.And thesecondthingthatwehavedoneis,wehavelaunchedthedynamic detergentdispenserinthesemi-automaticmachines,whichisapremium endofsemi-automaticmachine.So,allinallmoretocome,butIthinkwe haveadecentplanforthewasherseason.Forus,thecriticalthingis,we are not so bothered about other people, we justwanttodowhatwe need to do, which is grow our market share profitably. And that's basically our focus. Perfect,soundsgreat.Justalastquestiononthemarketsharegains,the three levers which you have alluded to which is additional brand promoters.Second,isnewproductlaunches.Andthirdismix,woulditbe byanychancepossibletobreakdownthecontributionfromtheeachof thethreeleverswhicharecontributingtothemarketsharegains,anda resultinmostlikelytheKoreanswouldhavelostmarketsgiventhelast sharethattheywouldhave,anyreasonwouldyouliketoaddresswhy such that is happening inyourindustry.Thatwillbemylastquestion. Thank you. Sure.Ithinktobehonest,wecan'treallygivethatbreakupbecause,likeI saidthatwouldliterallyservetheanswersuptoeverybodyonaplatter. And it's taken usalotofhardworktofigurethisout.Unfortunately,I can'tgivemorecoloronwhatcontributeshowmuch.Needlesstosay,it's notjustthesethree,there'salotmoreactually,whichIhaven'tdetailed out,thereisahugeamountofwork.Ifyouremember,Ialsotalkedabout thesalesincentivestructure.It’snotjuststuffthatcostsmoney,it'salso howweusethestufflikewhatAdityawassaying.Theincentivestructures isanotherbigthing,thereareseveral-severalthingsthatwehavedone, whetherdisplayshares,whetherdistribution,whetherit'sextraction.So, there'salotofworkthat'sgonein,it'snotonlythesethreelevers,these werethreeofthelevers,whicharealittleprominent,buttherearemany othersthathaveledtothis.So,thecombinationofthesethingsdonethe rightwaywiththerightinvestmentbehindeachis.That'swhatweneed to get right to get profitable market share growth basically. Andasfarasotherplayersareconcerned,Ithink, looklet'sbehonest, it'snotaonewaystreetforanybody.Ithinkwehaveseenyearsinwhich ourmarketsharehasgonedown,Ithinkthosenumbersaresharedwith youinthebeginning.Thatwasthesamecompanyanddoesitmean,it Page15of27
canneverhappenagain,yesitcanhappenagain.Weareparanoidabout making sure that it doesn't happen again. But, this is a competitive market and people take competitiveactions,allwecandoisfocuson whatweneedtodo.Wearenotdesperatelyfocusedonothers,welook atcompetition,whattheydointhemarkettounderstandwhattheyare doing and to understand the impact of what they are doing surely, throughthemarketshares.Butwespendalotmoretimemakingsure thatwearerunningtheraceweneedtorun,ifthatmakessense.That way,wecanbesureofourselves,ratherthanlookingoverashoulderat somebodyorlookingaheadatsomebodyandsaying,howdoIcatchup.I think we just need to pace ourselves and just do it right. That's all. Priyank Chheda: Wonderful, Congratulations and Allthe Best. Thank You so much Priyank. Thankyou.ThenextquestioncomesfromthelineofRaviSwaminathan from Avendus. Please go ahead. Hi Sir and thanks alot for taking my question and congratulations on goodsetofnumbers.Iknowthisquarterhadbeengoodbecauseofthe strong summer season. But in general, the demand environment, especially post COVID had been slightly soft. If you could give some commentaryonthedemandscenarioonanormalizedbasis.Howitison apanIndialevel.Probablyyoucangiveacommentaryonhowgoodrural is, urban is, that will be great. That'sagreatquestion.SoIthinkthisisactuallythe,Iwouldsayoneof thetrickierquestionstoanswer.Whathasactuallyhappenedthatwecan seepostCOVIDisthat,therewasabigbumppostCOVIDbasically,when people came back to the market, there was a maximum, I would say significantmarketgrowth,wearetalkingabout20%oddgrowthbasically, unfortunately,wecouldn'tparticipateinthatgrowthforvariousreasons atthatpointintime.Butthenwhat'shappenedpostCOVIDisweseeon anongoingbasisis,outsideofthesebigspikesthemarketgrowthhas been a little subdued okay, to be honest. And the reason that's happening is because what we can see for sure is that the premium segment of the market has certainly been growing reallyfast.Butthe bellyofthemarket,theentrylevelofthemarket,thathasnotbeendoing massivelyinthelastfewyears,right.Now,Idobelievethat,ofcourse,I amnotaneconomistatall,byanystretchofimagination.ButIdobelieve that,kindofhavingtheGDPgrowththatwehave,thetrickledownshould happen.IdobelievethatpostCOVIDconsumerswerespendingonalot of thingsthattheydidn'tspendonduringCOVID.Ifyoulookathouse prices,theywentupsomuchbasically,extraordinarily,rentalswentup extraordinarily, travel weallknowhowbrillianttravelwas,peopleonly getacertainamountofmoneyeveryyear.SayyougetRs.100lastyear, next year, yougetRs.110orRs.109salaryincrease.Youchoosewhere youputtheextraRs.9becausetheRs.100isalreadyaccountedfor.Now,I dobelievethatalotofpeopleinthelastfewyearsputtheirmoneyina lot more travel, wanting to see theworld,wantingtolookatdifferent places,youknow,almostcatchuponallthestuffthattheydidn'tdo.So, Page16of27
therewasasignificantincreaseintravel,asyouknowfromthereported figures.Hotelcostswentupbecauseofthetravel.So,allofthesewere inflationaryinnature.AndIthinkdurablesreallydidn'tgetthefullbenefit ofthisgrowth.Now,Iamhopingbeinganoptimist,thatatsomepointin time,andhopefullythatisfromnextyearonwards,butweneverknow thatthisgrowthcomesback,andwestartgrowingatleastattherateat which normally the country wouldbeexpectedtogrow,acountrylike Indiawiththiskindofgrowthwouldbeexpectedtogrow.So,Ithinkthat istheonething,andthesecondthingis,youknow,theotherthingthat usuallydrivesgrowthisinflation.So,theinflationinthisindustrytypically has not been very good at all,inthelastfewyears,drivenbyintense competition, and I am sure by decisions that different companies are makingontheirown.So,therearetwocomponentstoit.Therefore,one isthevolumegrowthandthesecondisthevaluegrowthontopofthe volumegrowth.Thevaluegrowthhasbeenverymuted,onlydrivenby premiumization,moreorless,predominantlyandthevolumegrowthhas not been that great in the entry and the mid-level basically, it's been muchmoreonthepremiumsegment.ButIdobelievethatinacountry likeIndia,withthekindofpopulationthatithas,rateatwhichthemiddle classisgrowing,someofthelovelyannouncementsthathavebeenmade withrespecttothenumberofhousesthatwillbebuilt,goingforward, etcetera when you build a house, the house will hopefully need a refrigerator,hadaminimummaybeitneedsawashingmachine,someof thehouses,maybesomeofthemneedairconditionerssurely.So,Iam hoping that these things areactuallygoingtostartcontributingtothe growth, not just at the top end of the market, but inthebellyofthe market as well. Understood sir. And mysecondquestioniswithrespecttopricing,we know it's a very competitive market, it had been competitive, it is competitive and likely to be competitive. But some factor like pricing probablywouldbeatthemargin.So,atthemargin,hasthingsimproved overtheprobablypastcoupleofyears,orisitatthesamelevel,or100%, so the elbow room for you to increase prices inyourproducts,hasit improved? Iwouldsay,whatweareveryclearaboutisthatit'saverycompetitive marketlikeyousaid.Iinthiscategory,becausethecostoftheproductis veryhigh,thepriceimpactisquitesignificant.Ithinkweopenlydiscussed that basically, and talked about how that affected whenwewereata price premium versusacompetition,howitaffectedourmarketshare andsoonandsoforth.So,Iwouldsayitismarketdetermined.Ifthere areopportunitiesinthemarkettotakepricing,Ithinkthecompanieswill takethemandeverybodytakesitindependently.Intheabsenceofany companies taking up pricing, obviously the value ofthemarketwould continuetobedepressed.So,it'saverydifficultonetopredictorplan for.Obviously,theonevariableinthisiscommodityprices,oceanfreight, allthesecostsgoingup.So,justcommonsense,say,thatatsomepoint intime,thatshouldbesomethingthatwelookat,basically.AndIamsure everybody will do their own mathematics on the topic. Page17of27
Understood. And my last question is with respect to the premium products. You had mentioned that the premium productshavegrown fasterthantheentrylevelproducts.So,thepercentageofsharewould haveobviouslygoneupoverthepastfewyears.Imeanifyoucanshare the number of what is the premium product share say double door refrigerator,intheoverallmixandautomaticwashingmachineandthe overall mix, and how it can read over a three, four years period? Yasure,wedon'tgiveoutthesharedata,bysegmentorsoonandso forth.Thisissomethingthatwedon'tdo,butIcankindoftellyouthat, typicallyoursharesarehigherthantheentrylevelhistoricallythanthey areinthepremiumlevel.Andtherefore,Iwouldsaytheroomforusto growinpremiumismore.Andsowhatwetrytodoismakesurethatwe get a certain amount of growth in the premium segment. Like I said before,therearesometimeswhentheentrylevelactuallygrowsfaster becausethemarketisfasterandwearequitestronginentry.So,weend upgettingahighergrowththere.Butstrategicallywewouldliketosee the premium shares growing ahead of entry on a going basis, on an absoluteapercentagebasispointgrowthyear-on-year.So,forexample,I am just making up numbers, if your premium share is 12% andyour regularshareis,entrylevelshareissay15%,youwouldlikethehigher percentageofgrowthonyourpremiumsharesoronyourentryshare. So,thatyourfinancialsworkoutbetter,yourmixisbetter.Obviouslythe morepremiumproductsthatyouhave,themoreyoucandrivethemthe betteroffyouareasacompanyfrommanypointsofview.Andsothat's what we really try to focus on. Unfortunately, numbers, percentages, etcetera we are not able to give out. Ravi Swaminathan: Understood Sir, Thanks Alot. Thank You, Thank You Ravi. Thankyou.ThenextquestionisfromthelineofAmitMahavarfromUBS. Please go ahead. AmitMahavar: Thank You, Eswar Sir, first of all congratulations on achieving a lotof operationalturnaroundifIcancallitsinceyoujoined,verydifficulttime andreflectingalsointhecashflows,notonlyintheP&L.Myfirstquestion ismoreon,ifyouseewhatyouhavedoneinlastcoupleofquarters,alot ofrepresentationwhichwasmissingforWhirlpoolinthetradechannels, you havemorepeopleonfloor,shopfloormarketWhirlpoolproducts, youhaveactuallyexpandedtheSKUsbothinrefandwashingmachine acrossfour,fivecategories.Canyoujusthelpusunderstandwhatisthe, which are the segments where you gain more market share in ref, it seems it's more in DC versus FF, can you just help us qualitatively understandthechangeinmarketshareacrosscategoriesinboththekey categories of ref and washing machine? Ya,ThankyouAmit,looksyouknowmorethanme.So,youareright,its prettymucheverythingyousaidisright.Wehavedonealottobehonest Amitonalotofareas,becauseexecutionwassomethingthatwewere verykeentogetright.AndlikeIsaidbefore,strategiesaregreat,butif Page18of27
youcan'texecutetheminthemarket,thentheyaremeaninglesstothe consumer. We have invested a lot in trade channels basically, as you talked about people on the shop floor explaining our productstothe consumer,whichweseeactuallyasawayofmarketing.So,wehavedone that,wehavedoneahugeamountoftrainingforthem,wehavemade sure that they are kind of comfortablewithnotjusttheproducts,but they areproudambassadorsoftheproducts,wehavebroughtinnew products,justtogiveyouacoupleofexamples,theDC,webroughtin five star after a couple of years, basically we brought in the five star industryverywell,webroughtinthefrostfreerangewebroughtinthe threestarafterquitesometime.So,that'sbeendoingverywellaswell. Like,wejusttalktoyounow,webroughtintheglassdoorsintoDCthat we never had before, whichisquiteacoolthingbecauseabrandlike Whirlpool bring in glass doors, it's wonderful. It's like, I pop across sometimethemarkettoBangladeshtobasicallyseeinandprettymuch thewholemarketthereisaglassdoor.So,glassdoorisawonderfulthing thatwebroughtinhereaswell.So,webroughtinalotofnewproducts but that's not all we havedonealotofexecutionalchangeinalotof areas.AndthereforeIthink,focusingonthatanddrivingthatiswhatwe really are clear about. And like I said,weputdownsomanydifferent things, basically. And we say okay, which ones, what are the kinds of bulletsthatwehaveforeachofthese.So,obviouslyadirect,ImeanIam sureyouknowaboutthis,butourdirectcoolperformancehasbeenvery good, we are very happywiththat.Andfrankly,ourinterestwillbeto makesurewecontinuewiththatkindofgrowth.Idon'twanttosaytoo much. But if you see the shares, you willfigureoutwhatIamtalking about. The direct cool refrigerators business, we have had some very goodsuccess,westartedseeingtheturnaroundonfrostfreeaswell.But, forustokindofeventhinkthatwhatevershareincreasewehavegotis ourstokeepthatwouldbefolly.Itisavery,veryhard-foughtbattleand it's got great respective competitors, who I genuinely respect and therefore I think we have got to be on our toes all the time. And in washers,forexample,wehadsomevery,verygoodsuccessinourtop loadingwasherbusiness.ButIamprettysurethatwewilltrytobringthat successtobearinourfrontloadingwashersbusinessaswell,whereour share opportunity as you know, we have been active for the lasttwo years, others have been active for more than a decade. So, in front loaders,wehaveatremendousopportunitytogrowthebusiness.Andwe will absolutely focus on trying to do that. So, for me there is alotof opportunitythatwehavebasically,obviouslythekeyistoinvestinareas that can give you a return, so thatwecanfocusonprofitablemarket share growth, but I must say that you pretty much answered your question. AmitMahavar: Thanks.Thesecondquestionis,youknow,alotoflowhangingfruitis whatyouseeminglyhaveachievedorinthecourseofbroadlyachieving it.ButyoualsohavesomeofthetoughcompetitionnowinBeko,which wasnon-existentwhenthelastbigmanagementchangehadhappened andIamnotworriedaboutcompetitionforWhirlpool,maybeWhirlpool andBekoasastrongplayerswillliftthecategoryandcutdownthetail. Doyouthinkforyouinthenextthreeyears,sayby26-27,theSKUsthat youtrackandthenyouplaninthemarketforthesetwocategories,will Page19of27
you be able to cutdownthegapvis-à-vissayifyoucomparewithLG, Samsung, particularly if I can name them, do you think that's a very strongandimportanttargetforyouandinthatcategory.Whenyoudo that,itneedsalotofinnovation,whichanywaysyouaretryingtodrive. So,anycolorabouthowtheSKUsacrossthecategorieswillmoveinthe next two, three years. I understand the limitation with which youcan answer this but anything incrementalishelpfulplus,thefactorysetup youhavenow,wehavemuchandmuchlessimportsnow.So,something around that, thanks Eswar. Sure. It's a very good question, actually. And I was expecting this question. It's a very good comment that you makeandit'saveryfair thingtosaythattherearelowhangingfruits.But,tobehonestwithyou, whatwehavetriedtodoAmitis,wehavetriedtofigureoutallthefruits, someofthemarelowhanging,someofthemaremediumhanging,and someofthemarehighhanging.So,thecriticalthingthatwetriedtodois figure out where are these fruits, how big are the fruits, what is the momentumofthesefruits,howbigistherunwayforthesefruits.That's whatIwastryingtoexplainatthebeginning.So,whatwehavetriedtodo is,comeupwithamenuofthingsthatwecouldpotentiallyinvestin,and whatreturnscouldthatget.Andsoinaway,whilethisisabittheoretical, butyouhavetoinvestmoneyaccordingtoacertaintheory.So,wework thatpieceout.Obviously,it'snotanexactscience,butweworkthatpiece outtosaywhatweshouldbedoingatwhatpointintime.So,Ithinkwe arenotcountingonanylowhangingfruits,obviouslyiftheyaretherewe willpluckthem.Butwearenotcountingonlowhangingfruitstobasically drive success going forward. Now I thinkthe question that you were askingme,basicallyifIcanreframeitastosay,whatistheambitionthat wehave,Iwillnotstateaspecificnumberorsomething.Buttobehonest, youplaygamesoryouplayinarenas,orbattleswithonlyoneintentisto win.So,that'swhatwewanttodo,wewanttowinandweknowthatit'sa long hard road to win eventually and we got to win year-after-year, quarter-after-quarter, month-after-month, week-after-week, day-after-day.That'showyouwillinthelongrun.Inthebattlesometimes youlose,sometimesyouwin.Butifyouwinmuchmoreoftenthanyou lose, that's how yougettoyourgoal.So,ourintentis,likeIsaid,very simplytodriveprofitablemarketgrowththroughidentifiedlevers,which we are fairly clear on which we track and measure with discipline financially,thatwetrytoexecuteasateam.AndwhatIamhappyabout isthattheentireteamisbasicallythinkingthatway.Whetheryoutalkto theleadershipteamhere,oryoutalktopeoplewhoareexecutinginthe field,weareallkindoftryingtothinkinthesameway.Wearenotperfect atall,nowherenearthat.Butwearetryingreallyhard.Andithinkthe intent will be only one which is, profitable market growth, sensible market growth, but market share growth, but continuously. And so whatevermarketgrowthcomesontopofthemarketsharegrowthfor meislikewow,that'sabonusbasically,butyoursalaryismarketshare, yourbonusismarketgrowth,that'sthewayweliketolookatit.Andwe like to invest it in sensible ways. If youhaveanopenmindandifthe organizationisharnessedproperly,therearesomanyopportunitiesthat can be leveraged. In fact, justtogiveyouasmallexampleofhowthe organizationisworkingnow.Theideatodoaconsumerpromoonthe Page20of27
front load washer machine actually came from a sales team in Hyderabad,theydonotcomefromthecentraloffice.So,doesn'tmean the central officedoesn'tgiveideas.Theygivealotofideaswhichare implemented. Butweareveryproudofthefactthatideasarecoming fromthegroundupbasically.Andweareimplementingthose,andwe implementthemfastandifweseetheproof,thenwegoreallyquickly. SoIthinkwehavealotofstufftodo,alotofbattlestoovercome.Butit's a very interesting fight and we are happy to be in this fight. Amit Mahavar: Thanks Eswar and good luck to the entireteam. Thank you. The next question is from the line of Umang Mehta from Kotak Securities. Please go ahead. Ya,ThankYoufortheopportunity,Sir,justwantedtounderstandforthis lowdoubledigitgrowththatmarketdidinthefirstquarter,whatwould havebeenthegrowthforeconomyend,sobasicallythedirectcoolrange, any sense around that? Ya I think, Most of the growth and I am sure you know, most of the growthactuallyinthefirstquarter,actuallycamefromrefrigerators.So, not most of the growth, all of the growth between refrigerators and washers came from refrigerators. So, refrigerators had a very strong growth pattern, both the direct cool range and the frost-free range actually grew quite significantly, strong double digits. Understood. And the second question was again ongrossmargin.So, whileIunderstandonY-o-Ybasis,thereasonsthatyouexplained.Ona Q-o-Q basis, isthereamixelementthatplayforthecontraction?That was my last question. Notasignificantone,whichwillimpacttheQ-on-Qmarginmix.So,asI explained earlier, the margin between ref and washers are not significantlydifferent.So,thatissomethingwhichhasanimpactonthe margins, than the mix not a significant impact on margins. Thenwhatwasthemain,there'sasubstantialcontractiononQ-o-Qbasis. So, just wasn't able to understand the reason behind that? So, what really happensinApriltoJunequarteris,(A)yourmixofthe product, for example AC becomes significantly higher, which has a relatively lower margin compared to a core T2 product sothatisone factor,whichimpactsquarter-on-quartermargin.Andthesecondfactor isaboutthesummer,forexampletherearealotofpromotionalschemes which are run in summer, which are not there in your Jan to March quarter.So,becauseofthesetworeasons,youwillseethatsequentially, you will see your gross margins could be a littlelowerinquartertwo versusquarterone.So,thosearethetwobigreasonswhichimpactyour sequential margins. Page21of27
Umang Mehta: Understood, That’s it from my side, Thank You Sir and Good Luck. Thankyou.ThenextquestioncomesfromthelineofRahulAgarwalfrom Ikigai Asset Managers. Please go ahead. Hi,ThankYou,GoodEveningandcomplimentsonnotonly1Qbutthe achievement you achieved in the last 12 months is wonderful. It was really commendable. Sir first question essentially was on the input content,mysenseisjustwantedtoknow,howmuchareweimporting right now from a material perspective,bothforWhirlpoolorElicaand wherearewerightnowandwhatkindofchanges,shouldweexpectany changes over there, that’s the first question. Okay.So,youaretalkingaboutfinishedgoods,right.So,almostallofour businessisbasicallymadelocally,refrigerators,washers,airconditioners, everything is made locally. There is very small, extremely small proportionofbusinessthat'simported.Ithinkovertime,theintentwill be to make everything in India, that's the intent very frankly that the countryhasoverallasacountryandthat'stheintentthatwewouldhave as well, touched on a lot of supply chain, and inefficiencies and complexities and so on, and so forth. But obviously, all of that localization,whetheritbeonfinishedgoods,oroncomponentsisgoing todependaloton(A)readinessofthelocalmarket,whichisvery,very, very,dependingonwhatthesituationis,dependsontheregulatorykind of rules and regulations that come in, about what shouldbedoneby when. And also depends a lot on the competitive environment with respect to cost and quality between local producers andinternational producers.So,there'salotoffactorsthatgointothis,withoutgoinginto thedetails,becauseIcannotsharewithyouunfortunatelyagain,because weareapubliclistedcompany,Icannotsharethatinformationindetail. ButwhatIcandoistellyouthat,asateamwehaveputdownallofthe stuff,andthenweprioritizedwhatshouldbedonebywhen,thatpieceof workhasbeendone.Andweareworkingonit,allofthemasyoucan imaginefairlycomplexprojects.Andweareworkingonthoseprojectsto makethosecomethrough.Ithinkitwilltakeafewyears,becausethere's alotof,let'ssay,alotofthingstobedonebeforeeverythingcanbedone locally. As you can imagine, in every industry it's the samestory.And certainly, we arenoexceptionasanindustry.So,wealsocloselywork withindustrybodiestomakesurethattheopportunityofmakinghere versusthecostofmakinghere,aswellastheregulatoryrequirements,all ofthosearebasicallymanagedinsuchawaythatithasbecomeviable for the industry, and not unviable, I think that's the key. Just a follow up on this, so in terms of, I was actually referring to competenceandso,likehowmuchareweimportingrightnow,what's our import content? Yes,sothatissomethingthatwewillnotbeabletospeakabout,tobe honest with you because wedon'tsharethatinformationpublicly.We haven't shared it, and we don't plan to share publiclyaswell.Butit's Page22of27
something that, to be honest pretty much if you know the industry numberit’sprettymuchinthesamerange.Moreorless,therewillbe one or two players who are more localized, there will be one or two playerswhoarelesslocalized,butquiteafewoftheplayerswillberight in the middle. Got it. The second question was, of course we have done enough to recover,backtowhatpositionswearerightnow.Butintermsofyour team,wherewillyoubespendingyourtimeonoverthenext12months intermsofthetopthree,fourchallengesinyourmindwhicharestilla gap or a challenge you see and will spend time on? Ya,Ithink,Basically,ifIlookatwhatus,whatdoweasateam,basically spend time on, the first thing that we spend time on is very frankly, profitablemarketshares.Howdowebasicallysecuremarketshareand continuetogrowmarketsharebuthowdowedothatprofitably,right. So,that'sthefirstbigone,becauseit'saverycompetitivemarketplace. Very, very good competition, very tough competition, people nobody wantstotakeastepbackwardinthisgame.So,thefirstthingthatwe lookatisprofitablemarketshare,thenwebasicallylookatworkingon ourowncostprograms,basicallywhichisabsolutelycrucial.So,first,isto drivetherevenue.Secondistomakesurethatweareworkingoncost, wearealwaysconsciousthatthereareheadwindsthatcome,sometimes theheadwindsarevery,verystrong.Iwouldsayrightnowwithallofthe stuffthat'shappeningonoceanfreightandcommodities,etcetera,itis harderheadwindthanhasbeendoneinthepastandit'struenotonlyfor us,it'strueforentireIndia,it'sactuallytrueforthewholeworldaswell. So, commodity headwinds are quitesignificant.Competition,Ithink,is theotherone,butlikeIsaid,whatwedoisweunderstandwhattheyare doinginthemarketplacebasedontheiractionsinthemarketplace.And wefigureoutifweneedtoadjustourstrategiesornot.Theotherthing thatreallyisverycriticalforusistomakesurethatwehaveaveryclear vision, we are very clear strategic imperatives. All the people in our organization are aligned tothestrategicimperatives,andwemarchto thesamedrumbeat.So,makingsurethattheorganizationismarchingto thesamedrumbeatandeverybodysingingthesamesongisanextremely important thing for the leadership team, which is what we focus on. Got it, thanks very much for answering my questions. And really appreciatetoholdthiscall,Ithinkasashareholder,justrequestthatif we have these periodical discussions,itreallyhelpstounderstandthe numbersbetter.So,hopetomeetonfuturecallsaswell.Thankyouso much and all the best. Thank You Rahul, Thank You verymuch. Thankyou.ThenextquestionisfromthelineofShrinidhiKarlekarfrom HSBC. Please go ahead. Ya,Hi,Thankyoufortheopportunityandcongratulationsonthegoodset of numbers. So, just couple of clarifications. So, did youmentionthat botheconomyraiseaswellaspremiumrangeofproductdidexcellentfor Page23of27
therefrigeratorcategoryinQ1andyouhavehadagainsinbothdirect cool as well as frost free subcategories? Yes, please. So, when you say economy and premium you aretalking aboutdirectcoolandfrostfreeIpresume,becausethewaywekindof lookatitiswithindirectcool,welookatentry,middleandhigh,kindof thing. So, if you areasking,didthedirectcoolbusinessaswellasthe frost-freebusinessdowell,inthefirstquarter,theanswerisyes.Bothdid well, from an industry point of view. Okay. And within the DC as well,did entry also did well? Yah-yah. Yes, because I mean It was a very hot summer as you can imagine.So,entryfromamarketpointofviewalsodidreasonablywell. What I think is also, so all the segments actually grew and as far as refrigerators are concerned entry, mid and premiumacrossDC,direct cool as well as frost free. So, all of those segments grew. And sir share gains, you havein both DC as well as frost free? Yes, we will not be able to share the details. But yes, we have had, obviouslytheyaredifferential.OursharegainsandDChavebeenmore than frost free, but both have grown. We have had some very good success in DC. Great.AndsirsecondquestionIhadis,soweareseeingisthat,channel mix is shifting in India, it is moving more from general trade to e-commerce and modern format retailers. So, how do you seeitasa headwindtotheprofitabilityofindustryandthereforethecompanylike Whirlpool and create lot of channel or do you think it doesn't really change much from the profitability of the industry perspective? That'safantasticquestionactually,honestly.Youareright,thereisthat kindofashift.But,Ithinkfirstbasedonalltheexperiencesthatwehave seenacrosstheworld,notonlyinthisindustry,butalsoinFMCGthatI workedformanyyears.It'snotgoingtobeacompleteshiftwithnothing happening in traditional trade. That's never going to be the case ina country like India, you are always going to have a traditional trade business,purelybecauseofscaleand alotofotherreasons.So,youwill alwayshavethetraditionaltradebusinessinIndia,anditwillalwaysbea reasonablechunkofthetotalbusinessfirstly.So,Ithink,oneoftheone hand margins can be affected by shifting tomoreorganizedtradefor obviousreasons.Theotheradvantagethatwehaveisbecauseyouare displayingandyouaredrivingthevisibility,andyouareprovidinganicer environmenttoshopin,etcetera,etcetera,propensityyouincrease,your basketalsoincreases.So,tobehonest,thewayIlookatitis,India'san amazing story going forward. BecauseifyougrowataGDPgrowthof what7%to8%ayear,hopefullyevenmoregoingforward.Withthereal rateofgrowthbeingthatnominal,youaddontopofthat,youarelooking at a business that is going to, a country that is going to grow GDP significantly, it's hopefully going to double its per capitaby2030.And then you are talking aboutalotofpeoplecomingintothepurchasing Page24of27
space.So,thebellyofthemarket,ifIcancallit,isgoingtobecomebigger andbigger.Andwhenthebellybecomesbiggerandbigger,thereismore andmoreopportunity.So,imaginetoday,soit'snotazero-sumgame. That'sthepointIamtryingtomake.Itisnotazero-sumgame.Thatisthe beauty of India. So, I am super happy that e-commerce grows, and moderntradegrowsandtraditionaltradegrowsbecauseallofthemwill grow. And the reason I am saying that is because again, I want to re-emphasizeIndiaisnotazero-sumgame.Itisnota,Iwillonlygrowby 3% so, if you grow, I have got a de-grow not at all, there's space for everybodytogrowinthisamazingplace.Anditisnotthecaseforthe next five years. In my view, it's the next case for the next 30 years, probably.So,atleastinmylifetimeandIamsureyouaremuchyounger thanIam.Butinbothofourlifetimes,wedon'thavetoworryaboutlack of growth. So, I think the propensity where refrigerators are selling mid-30s, in penetration, refrigerators can go up to mid-60s, mid-70s. Washingmachinesaremid-teens,washingmachinescancomfortablygo uptomid-30swithoutadoubt.ACsarelessthan10%,whycan'ttheygo up to 50%. So, the point I am trying to make is, in modern trade,or e-commerce or whatever, youhaveabasket,abiggerbasket,because you have more space, youhavemorepeople,blah,blah,blah.Andso therefore whatever youloseinapercentageyoumightmakeupinan absolute.So,Ithink,thebeautyofIndiaisthat,onedoesn'thavetoworry somuchaboutit,ofcourseyear-on-yearyouhavetomanageyourP&L, absolutely.Butinthelongrun,thisisgoingtobeagreatstoryforthe durables industry. OnemoreifImayasksir.So,lookatyourmarginshaveimprovedquite sharply,buttheycontinuetobeagood5%,6%lowerthanwhatweused todobeforeCOVID.So,justwondering,doyouthinkthatmarginsare structurally gone down? Some of the players in the air conditioning industrydocallitoutthatsectorialmarginsinIndiaprobablyhavegone down.So,Iwanttoshareyourperspectives.Isthereapossibilitywherein youcangobacktothemarginsyouhavehadbeforeCOVID,whichinfirst quarter was typically 14% to 18%? Ya,so,tobehonest,it'sverydifficulttopredict.ButwhatIcantellyouis thatthemarketismuchmorecompetitivethanitwaspreCOVID.Much morecompetitive,somebodyonthecallelsehasmentionedaboutvery strongpricingactionbeingtakenbydifferentpeople,etcetera.Fromour pointofview,weareveryclearthatthelong-termguidancethatwehave givenishighsingledigitprofitmargins.That'swhatwehavegiven,and weabsolutelystickonlywiththatandthat'sthelongtermguidancethat's not tomorrow morning's guidance. It's a long term guidance and the reasonwearesayingthatisbecausewerecognizethatthemarketisalot morecompetitivethanitwasin2018.2018-2019,youhadpeopleexiting themarket,todayyouhavepeopleenteringthemarket,everybodywants tocomeintoIndiaandgrowthebusinessinIndia,everyglobalCEO,has declaredIndiaastheirmostimportantgrowthmarket.So,thisisjustthe reality;thisisthefactofourgreatcountry.Andsoeverybodywillwantto come in, everybody will have market share. That means there will be pressureonprofitsandmarginsandsoonandsoforth.Andtherefore, havingmassivemarginsprobablyisnotverylikely.Atsomepointintime, Page25of27
Icantellyouthatwhenalltheregulatorypressuresaswellhavegone, becausekeepinmindthatwhenyouhaveregulatorychangeseverytwo tothreeyears,threetofouryears,thatalsobringsinasignificantamount ofcostintoallplayers.Nobodyisanexceptiontothis.So,youhavegot competitivepressures,youhavegotregulatorypressures,allofthesewill impact people's margins. And therefore, I think steady progress year-on-yearisthebestthingtolookforwardto.Wehavecalledourhigh single digit in the long term and that's what I think, we can aspire to. Thank You for answering my questionssir and all the very best. Thank You Very Much Shrinidhi. Thankyou.Moderator,wewilltake,ifwearealreadyovertime.Wewill take one last question before concluding the call today please. Certainly,ma'am.WehavethelastquestionfromthelineofNirranshJain from BNP Paribas. Please go ahead. NirranshJain: Ya.HiSir,ThankYoufortheopportunityandcongratulationsongoodset ofnumbers.Sir,firstlywantedtocheckontheworkingcapital.So,ifIam not wrong we are a company that is already operating at closetonil workingcapitaldays,forovertheyears,butwhatwehaveseeninthis resultalsolikeweareabletogenerateaverystrongcashflowbecauseof continuedimprovement.So,Ijustwantedtocheck,dowehavescopeof furtherimprovementintheworkingcapitalanddirectionallyisthereany targetforhowmuchworkingcapitaldayscangoto.Andsecondly,Ihave a question on the discounting part. So, we have seen consistent, like increaseinthediscountingoverthepastfewyears,butnowconsidering thatwehavetakenasignificantpricecorrection,realignedastrategyin linewithourcompetitors,so,canweexpectsomemoderationinthepart of the discounting. So, those were my two questions. Thank you. I will take the questiononworkingcapital,soourimprovementinthe workingcapitalrightnowhasbeendrivenmorebyinventories.Whatwe havedoneasIsaidinmyearlierpartofmyperformanceandresultsis thatasanorganizationwehavebeenworkingonimprovingthequalityof theinventories,andhenceasignificanteffortwentbehindliquidityslow movingnon-movinginventories.Now,giventhelevels,wearecurrentlyat inventories,isthereafurtheroptimizationpossible?Yes,youcanalways lookatopportunitiesbutarethebigopportunitiesavailable,probablyno, unless yousignificantlyimproveyourcapacities,forexample,andthen yousaythatyouhavesignificantlyincreasedcapacity,thenyoucanwork on anything, you can lower inventory so that'sone.Onthereceivable side,againit'sapublishednumber,thedaysyouoperateat,weoperate at pretty healthy days. And the third lever on the working capital is accountspayable,sohavewereachedtheendofit,obviously,no.Wewill keep looking atopportunitiestoimproveworkingcapitalacrossallthe threeleversbetweenAPARandinventory.Whatarewetargetingagain, it'samatterofguidanceagain,andwedon'tdisclosetheexactnumbers, but then opportunities will alwaysbethereinthevariousareasaswe look at each and every nook and corner of our business. On the Page26of27
discountingside,justwanttogiveyourperspectivethenumbersifyou lookatpublishednumbersonthebalancesheet,year-over-yearnotseen anincreaseindiscountingpercentage.It'smoreorless,theflattish.Ifyou lookatthediscountfortheTPI,aspercentageofrevenue,wehavenot seenanychangeonthosenumbers.Pricingisafactorofmoreconsumer in competition led, so that we will keep calibrating between what's happeninginthemarketandwhat'smarketcanabsorb.Buttheintent would be to hold the discounts flat to where we are, largely. Nirransh Jain: Sure Sir, That’s Very Helpful. Thank You and all the best. Thank you. Thank you Mr. EswarandMr.Jainfortoday'ssession.And thankyou,ladiesandgentlemen,forjoiningustoday.Withthat,Ihandit over to the moderator to close out the session. Thankyou.OnbehalfofWhirlpoolofIndiaLimited,thatconcludesthis conference.Thankyouallforjoiningus.Youmaynowdisconnectyour lines. Page27of27