Whirlpool of India Limited (500238) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the analyst call of Whirlpool of India Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Bhavani Kumar from Axis Capital Limited. Thank you, and over to you, sir.

Thank you so much. Good evening, everyone. On behalf of Axis Capital Limited, we welcome you all to Whirlpool of India Analyst Call for the first quarter FY '27. From the management side, we have N. Eswar, Managing Director and Chief Financial Officer of the company; and Ms. Sweta Srivastava, Company Secretary, joining the call. We thank Whirlpool of India for giving us the opportunity to host the call. Now I would now like to hand over the floor to Ms. Sweta for his opening remarks, post which we'll open the floor for Q&A. Thanks, and over to you, ma'am.

Thank you, Bhavani. Good evening, everyone. I would like to welcome you to the Q1 analyst call of financial year '26-'27 of Whirlpool of India Limited. Please note that the call is being recorded, and the audio call and transcript will be available on the website of the company. Also, the presentation to be made by the Managing Director and Chief Financial Officer, is available on the website of the company as well as the stock exchanges. Before we move forward, I would like to remind you of the cautionary statement that forms part of the presentation. During this call, certain forward-looking statements may be made. These forward-looking statements are based on certain expectations, assumptions and other factors, which may affect the business results. Please read the cautionary statement carefully, and the contents of this call should be interpreted accordingly. With that, I would now like to hand it over to Mr. Eswar.

Thank you, Sweta. Good afternoon, everyone. I'm Narasimhan Eswar, Managing Director of the company. I'd like to welcome you to this analyst call. Thanks very much to Axis Capital for making this happen. and thank you to all of you for taking out your time and joining us. I'll start with the update. I will do the first two sections. We go now to Slide 4 of the presentation deck. I will cover the business overview and the strategic imperatives, and Mr. Aditya Jain, Chief Financial Officer, will cover the financial performance. Could we go to the next slide, please. So, if we go to Slide #6, the business overview. Let me start with the highlight of the quarter. Apologies for my voice, a bit of cold flu. The first point really is that we have delivered a record revenue growth in this quarter. We've never done the revenue numbers we have done before in our history. We also delivered double-digit revenue growth. In terms of multi-brand outlet market share, which is where we compete with other people in offline, we continue to maintain our #2 position in refrigerators and washers. So we call it T2, our internal language, refrigerators and washers. We continue to maintain our #2 position in volume market share in multi-brand outlets. We also continue to hold our #1 position in direct cool refrigerators in multi-brand outlets for volume market share, and that has been the case for the last seven months. We have been able to complete our selling sellout, the phasing that we had to do for the old refrigerators and the new refrigerators that was completed this quarter. That has also helped us in getting back some market shares, as I said last time. In front load washers, we had a triple-digit increase in market share, again, the same multi-brand outlet KPI, volume market share, and that business is doing very well for us. Same with air conditioners, where we delivered a 50% plus revenue growth. Elica, we're very pleased to say, continues with a very strong performance. Revenue was up 26% and profits are up 22%. One thing in the quarter that did happen, partly expected, partly unexpected, was our margins were significantly impacted due to both the impacts of the war, basically in two areas. One is in anything that was influenced by crude oil, which obviously pricing went extremely high and continues to be quite high. The second part of it was all the energy changes, the regulatory changes, which included energy changes in e-waste. I had already highlighted at the beginning of the calendar year that energy changes would be a debilitating impact from this year's financials. Obviously, the war impact was on top of this, which we did not expect at the beginning of the financial year. This, I presume, is true for the entire industry and probably the broader country as well. One critical thing is that in this business, the companies have not been able to recover the impact of the combined war and regulatory impact through pricing because of industry competitive dynamics. That obviously impacts the numbers of margins. We have navigated the challenges on supply chain, which were extremely high in April, May, June, whether it was availability of LPG or whether it was availability of oil-based products, whether it was availability of components and parts. There were a lot of challenges that happened because of this situation that we have in the Middle East. But we were able to, in fact, I'm very proud to say, deliver record-breaking production numbers in our Faridabad plant, which makes all our, not all, most of our the cool refrigerator business. I just want to recognize the great work done by our team to do this in spite of some days not knowing whether you would have stocks for next day's production. So we did not have any stoppage because of that, and we were able to deal with it. Lastly, I would say, on net working capital as well, we lived up to our promise that we made. We have a net negative net working capital this quarter. And all the investments we made in the last quarter in air conditioners have been fully recovered, as you'll see later. Go to the next slide, please. Now this is the standard slide that I always show you. On the top, basically, you have the quarters starting from October '24 now to April to June '26. The industry volume growth was again in single digits growth. But our actions this quarter, there were quite a few. One is we completed our entire refrigerator phase-in, phaseout. That was one significant thing we did. This was because of new regulations that we had to change all the refrigerators in all stores. Second, we were able to take up in April and May pricing, which partly covered the war-led inflation and the regulatory inflation, but not fully, like I said, thereby impacting margins. We continue to scale up both our air conditioner business and our front load washer business where we have low volume shares and where we have significant opportunity. We also launched a few NPI, new products, including top load 11 kg, getting into the top load large segment vacant space that we have. I am reasonably happy to see that our volume share was up basically by double-digit basis points, reasonably decent double-digit basis points versus a year ago as a result of all the actions and the continuation of the phaseout. So revenue up double digits, market share is up as well. If you go to the next slide, please. If you go to Slide 8, we are giving you a further breakup of what is it by category like we always do. So in direct cold refrigerators, like I said, we completed the sell-in sellout, and we were able to actually grow our market share versus last year by double-digit basis points. In semi-automatic washers, we are happy to say we were able to, for the second quarter in a row, grow the market share by more than 100 basis points versus the previous year. And similarly, in front load, of course, we continue to drive market share as we've done for the last two years plus. In Frost Free refrigerator, there were some supply-related issues that we had, which held us back. And also, there is a gap that we have in the market where we were not present at all in refrigerators above 500 liters, 600 liters, et cetera. I'm just going to cover that a bit later. But we are literally launching today our large-sized refrigerators, as I promised all our shareholders that we would do it, and we are actually doing it as of today. We are launching our photo refrigerators, which I'll cover now. I hope that in the course of the next months, we will start seeing clearly because we are filling up vacant spaces that we were not in across the next 12 to 15 months, we will start to see our Frost Free refrigerator shares go up as well. Top load washers has been highly competitive. And versus the growth of last quarter where we grew double-digit basis points was a year ago. This quarter was a bit of a decline. But then we have our new products, et cetera, that we are bringing in, and we have other plans as well that we're investing in to take it back. So all in all, reasonably okay with the revenue growth of double digits as well as the market share performance with some opportunities to improve, but we have clear line of sight as to how to do that. Next slide, please. So the other thing that is worth highlighting is after a couple of quarters in quarter 1 and quarter 2 of '25, '26, where we were declining revenue, quarter 3 of '25-'26 was up 4% on revenue on a stand-alone basis. Quarter 4, '25, '26 is up 7% and quarter 1, '26-'27 is up 11%. And this is based on not just the industry growth of single-digit -- mid-single-digit kind of industry growth, but our market share grew as well, which adds a couple of points. And then, of course, we are pricing across categories helps us. It also helps that we have AC and front load basically driving this business being high-value products. Next slide, please. As I said, margins were significantly impacted. We already knew that regulatory would impact the margins because we have the impact of the refrigerator and the AC, which is nearly 2/3 of our business being impacted by significant regulatory changes. But on top of that, we had the war impact. Obviously, there are two big impacts that happen from the war point of view. One is the impact on crude and crude-related things and of which there are quite a few in our industry, whether it's washing machines or refrigerators, whether it's MDI, polyol, EPS that we do for packaging, et cetera. So there's quite a bit of it. And those costs have gone up significantly due to the war because many of them are single sourced for the industry and for India from certain places in the Middle East. The second part of it is the regulatory part, where there are two components to it. One is the big refrigerator sorry, I just skipped one point. So the war impact has got two parts to it. One was the crude oil and the second is the ForEx. So obviously, with a certain amount of components that we need to import as does the rest of the industry, there's a certain amount less than 30% that we import. And that is obviously impacted by the dollar rate going up. The dollar used to be 88 last year. Now we're sitting at about 95, 96. And obviously, that's quite an extraordinary increase. So these two things basically have impacted significantly on top of the regulatory costs that I spoke of. And of course, we continue accounting for e-waste at the higher level. If you see the gross margin and the PBT margin are pretty much the same, which means the rest of the lines of the P&L, we haven't actually increased anywhere. It's like a straight flow-through. As we go forward, I'm sure there's a very big question on everybody's minds, what do we see going forward? I think the war-related impacts, frankly, depends on when this whole thing gets over. I think that hopefully is something that we're all looking forward to. What happens to the crude price and what happens to the ForEx that will directly impact the P&L, if there's a saving there. I think on the regulatory part, for this fiscal is here to stay. Next fiscal, obviously, we anniversary this fiscal. And on e-waste, I really, really look forward to and hope that we will come up with a solution that actually works for the entire industry because it's an industry-wide issue on e-waste where we're accounting at a much higher rate than what can be commercially procured. So that is something that we look forward to. So potentially, the war ending is going to be a help to the entire industry and certainly to us. Similarly, e-waste resolution, let's say, an equitable resolution at some point in time would be very helpful. Next slide, please. The other thing that I would highlight is that our working capital continues to be a strong performance. As you can see in the last eight quarters, we basically had five quarters with negative net working capital. The reason why September '25 had gone up significantly on working capital was because of the GST change impact that happened. March went up because of air conditioner sales. But if you see in June, we have recovered all of the Aircon working capital, the collect of the receivables, and therefore, we go back into negative net working capital, and we are reasonably happy with the efficiency of the operation itself. Next slide, please. So I'll move to the strategic imperatives, apologies for the voice. As we said, the imperatives are basically four in number, inspire generations with our brands, win with product leadership, building a competitive and resilient supply chain and excellence in execution. We go to Slide 14. This is just a reminder of what we've done in the past in terms of inspiring with our brands. As I've said before, we were the Early Pioneers in Colours and Finishes. We introduced Pedestals. We introduced Auto Defrost in Direct Cool, we still have the First 3-Door refrigerator that is Frost Free in the country. We introduced the Platina range, and we introduced the First VA Heater in top load washing machines. So a pioneer in the India durables industry, let's take a look at what we are doing now. Slide #15. We are very, very happy to introduce to you Whirlpool Luxuriem, which are the 4 door premium refrigerators. We're introducing the 654-liter 4 door premium refrigerator. These are several, several first fantastic products. This is India's fastest convertible in its class. It converts in less than 30 minutes from a freezer to a fridge, which is unmatched in India. This is the first time that we have something that we pioneered called the freshness detection technology. This has been developed by our engineers in India with the help of global technology, but really pioneered in India. And the greatness of this, I'll talk to you about a little later. This literally will tell you whether your fruits and vegetables are fresh or not. And if it's time for you to start consuming them, so you eat healthy. This, I think, is quite a cool revolutionary kind of development that we've introduced to India. We are also in this range, introducing the first ever glass and steel front face. So half the refrigerant is glass, the other half is steel, and it looks absolutely fantastic. And lastly, we also, in this range, have something called Obsidian Interiors, very dark interiors with beautiful lighting. So your refrigerator literally feels like a theater. So I'll talk more about this later. We are extremely proud that this entire thing is made in India, thought through by India, executed by India, and it's rolling of our Pune lines where we've invested INR 245 crores on this technology. Next slide, please. On the next slide, I just show you some examples of the premium range. Starting from the left to your left of the screen is the mirror finish. Next to that is a premium green finish called Cristal Verde. Then there is the one with a water dispenser, steel finish. The one after that is something called Bianco Nero, which is white and black. And the last one is the Duo, the metallic and Glass DUO refrigerator. And there are more as well in this range, but these are just an example just to give you an idea of the kind of premiumness that we are introducing into this market, the kind of features that we're bringing in. Next slide, please. Let me go through some of the really exciting things that we're doing in this. These refrigerators, the 654-liter Luxuriem refrigerators are the gold standard of refrigeration. Normally, a side-by-side kind of refrigerator which you get for 70,000, 75,000, 80,000 would have one evaporator which cools the entire fridge and freezer. And because one machine is cooling the entire fridge and freezer, there is a challenge on evenness and there is a challenge on how well the cooling is done. Now the beauty of our system is that this is a triple evaporator. So, you can see there are three circles there, three blue kind of graphics. So the top of the refrigerator is basically your fridge, and that's got one evaporator. At the bottom, you have two freezer zones. Now one of the freezer zones, the freezer to your left is a full freezer, okay? So it's always a freezer. So whether you want ice or you want your ice cream or you want to keep your meat or fish, you can keep that in that part, right? And on the right-hand side is the convertible part. So this part, the right-hand side bottom is basically a freezer that can become a fridge within 30 minutes. And so this was based on 1,000-plus hours of research we did with consumers to understand what is the ideal product. It was very clear from our research that consumers really believe that the door is far more preferable than the side-by-side format. And the features that we're talking about here and what I'll talk about a bit more, they're all added based on consumer research. So the beauty of this is the fastest convertible, the flexibility to store large vessels, which would be difficult in a side-by-side because the fridge zone is quite small. Whereas here, as you can see, the fridge zone is quite large. So you can put a patila or a big vessel where you've cooked dal or sabzi or whatever it is, you can put it right in the refrigerator without having to worry about the size in the fridge part. And the other beauty of this is because they are independent air flows, the smell from the fridge, the freezer will not go into the fridge. As you can imagine, the air flow is within the evaporator section on that side. And therefore, whatever smell is in the freezer will stay in the freezer, whatever smell is there in the freezer and convertible, which is the right will stay there and whatever smell in the refrigerator will stay there. So there's no transfer of smells between, say, your meat, which is in the freezer and your vegetables, which may be in your fridge. Several more benefits of the triple cooling system, the three evaporators, but it's quite a cutting-edge technology usually compared to the, this would be tremendous value for Indian consumers. I do believe that we will start to shift to 4 door refrigerators with this because the pricing is very attractive for all of this. Next slide, please. So I'm going to talk to you about four things in this Luxuriem, which make it simply peerless. The first is the technology I've not spoken about. This is something called Sixth Sense AI. So it truly is an amazing technology. It has never been seen before in India, and I dare say probably never in the world. So this is something we've developed here. And what is it? It's basically there are sensors that are calibrated to read the ethylene gas emission levels from fruits and vegetables. Fruits and vegetables, once they are plucked from a tree, automatically start emitting ethylene gas. And as they get riper and riper tending towards spoiling, they emit more and more ethylene gas. What this does is this particular chamber of the refrigerator, which is just below between the refrigerator and the freezer, this is called the Intelli Crisper. And this is going to have a sensor-based AI system, which will measure the ethylene gas that's being released by the fruits and vegetables, and based on database, which continuously refreshes itself. Just for perspective, every 10 seconds, the level of ethylene is checked. So there are 8,000 readings made to calibrate the system. And the whole intent is that even before a vegetable starts spoiling, it will start emitting more ethylene gas. So the system reads that. And before your vegetable starts spoiling, it gives a flashing light to show you that something could start spoiling pretty soon in your refrigerator and you must ideally use it so that you can eat healthy. So this is something that we're doing, which is based on consumer feedback. People wanted to basically get fresh fruits and vegetables, and we couldn't think of a better way to do this, and like I said, I don't believe that anybody else has this kind of technology, certainly not in India, and I doubt if anybody else has it in the world. So we are extremely proud of this technology. If you go to the right-hand side, I have already spoken to you about the superior format of the 4 door versus the side-by-side, whether it's a storage of large vessels, whether you can see everything at one time. Also, we genuinely believe the Indian consumer does not need half of the refrigerator more or less being a freezer. And so therefore, we are giving more options for the consumer to have freezer space. If they want it, a significant amount at the bottom. But if they don't want it, they want to make it a refrigerator, then it becomes one within 30 minutes. And then they can, of course, turn it back into a freezer again. If you then look at the bottom left quadrant, we are very proud of the aesthetics that we're bringing to the market. I talked to you about the glass door. I talked to you about the differentiated CFMs in the first space that I showed you. You can see here the Obsidian interiors. You can see that the interiors are dark gray, a very, very premium dark gray with fantastic theater lighting inside the refrigerator. So you're going to have lighting inside the refrigerator, so you can easily see what product you have in your refrigerator, right? And it looks absolutely fantastic. So there's Obsidian interiors, there is multiple finishes. There is the first glass metal. And lastly, if I look to the bottom right quadrant, this, like I said before, is the fastest convertible in the market. In our entry level between 255 and 360 liters, we have the fastest convertible in the market. And so this is something that we are bringing to the large refrigerators as well. This was a must-do for us. I'm so glad that we've been able to achieve that with the fastest convertible in the market in the large refrigerators. Next slide, please. We not only launched Luxuriem, which obviously we are very proud of, but we also launched large size in top load Bloomwash, which is our hero. We launched 11 kg with a completely new color, which is being quite well received in the market. It's called Juniper Green. And what is really cool about this is that typically, there's a quick wash cycle that other machines have. Whether you put in a small load or a medium load or a large load, typically, other machines wash it for a certain amount of time, for example, 35 minutes. But this, we have done it in such a way because we want to add value to the consumer, the consumer sometimes uses small loads, sometimes medium loads and sometimes large loads. So based on that, we have customized the amount of time that the washing machine will work for. So small loads are 30 minutes, medium loads are 35 minutes and large loads will be 40 minutes. It also has what we call Soft Sense, which is a system by which we, through the dispenser, automatically release the right amount of softener at the right time without you having to worry about how much soften to put in. So it's automatic and obviously, the CFM. So very, very proud of this SKU and look forward to its success in the market. Next slide, please. Slide #20. As I said before, in semi-automatic washing machines, our Dynamix Dispenser Technology, which I've explained in previous times, which is basically that we are able to guarantee zero detergent patches on semi-automatic washing machines using this technology. And the reason we're able to do that is because it premixes to a very efficient scientific system, water and detergent completely before it goes inside the washing area. And we have now launched even 8 kg capacity in the Dynamix Dispenser. And now 50% of our semi-automatic washing machine has this Dynamix Dispenser, which is decommoditizing semi-automatic washing machines. So semi-automatic washing machines for us is not just about price and capacity, which is what the entire category has been playing on, bringing larger sizes and cut the price. We are actually adding value to this category by bringing in something like Dynamix detergent dispenser, which will help you have zero detergent patches on your clothes, which is what consumers really want those who are using powder in semi-automatic dispenser. Next slide, please. Slide #21. As I said before, our Front Load Washer business continues to accelerate. We grew about 18% volumes versus last year with a triple-digit basis points in market share versus last year. And this is a business that we'll keep driving as we go ahead. Next slide, please. And similarly, on air conditioners, our growth this quarter was 50% more than last year. In both these categories, our market shares are in the single digits. And obviously, our intention is to try and get into double digits as soon as we can and get into mid-double digits, which would be a good achievement. The beauty is that these are high-value categories that premiumize our total business. Next slide, please. Slide #23. We are bringing in new products in Elica as well, and you can see that in the results, whether it is the slim BLDC filter, less oil collector product with the slim design kitchen hood or the Plug N Play Kitchen Hood, which is a Kitty Plug N Play, as we call it. It doesn't either exhaust or the flexi hob2 top that we have with the full brass direct multi-flame burners and cast iron pan support, as well as black toughened glass and auto ignition. We continue to innovate on the premium end while driving the popular end as well. Next, please. Also delighted to let you know that we've been able to get international accolades on innovation and design. The A Design Awards are given by an Italian-based organization, and they are very prestigious awards globally. And we're very proud to say that our products in frost-free, whether it is Jade Marble, these are the glass doors in frost free that we introduced last year or the 3D Protton Nxt, where we have upgraded significantly our 3-door Protton range. Both of these got silver awards on design. And the comments that you see there are the words of the award committee from Italy, which basically talk about - The sleek facade featuring marble patterns and gold accents transforming the appliance into an architectural center piece or in the case of Protton saying it distinguishes itself in a crowded refrigerator market by utilizing a 3-door format that prioritizes better organization because of the fruits and vegetables having a separate drawer. So very happy with that. Next slide, please. Slide #25, we continue to really focus on excellence and execution. This has been at the centerpiece of what we do, whether it is with our customers, especially this quarter with our supply chain or with our service, which continues to operate at a very high level in terms of numbers. Next slide, Please. As I then move on to what is at the core of our supply chain, we've got a robust P4G program. First, we'll talk about manufacturing. As I said, we are very proud that we started our new 4 door premium refrigerators in Pune plant in July. It starts shipping out as we speak today to customers. The new 4 door premium refrigerators, we call Luxuriem. But we're also very proud that despite a lot of war-led supply constraints as well as wage code-led constraints that happened in Noida that affected a lot of our component suppliers in April and June. we were able to come up with record manufacturing numbers in our Faridabad plant in Q1. So very proud of our team for that. P4G, we continue to drive a robust P4G program to drive cost efficiency that covers all lines of the P&L. I will be honest, it's obviously in this environment where all the costs are escalating quite significantly, especially with respect to oil prices and ForEx. It's obviously much more difficult to control compared to what we've been able to do in the past because of the war efforts, the war impact, I should say. Thank you. Next slide, please. So I'm just going to hand over now to Mr. Aditya Jain, our CFO, to talk to you through the financial performance. Thank you.

Thank you, Mr. Eswar. Good afternoon, everyone. I'm Aditya Jain, Executive Director and CFO of the company, and I'll take you through the financial performance of Whirlpool of India Limited. I'm on Slide 28. And on this slide, this slide talks about the financial performance of Whirlpool of India on a stand-alone basis. As you can see from the slide, we delivered a top line revenue of INR 2,582 crores. This is the highest ever revenue for the quarter in the industry of Whirlpool, which we have delivered. So very pleased to announce that. And this is a double-digit growth of 11.4%. This revenue growth was driven by a multiplicity of the factors: A, our industry, which is the refrigerators and washers multi-brand outlets volume grew in mid-single digits, which also helped us. But that was not the only factor which drove our top line on top of the industry growth. Our market share also grew, and we grew market share in double basis points across all the categories of refrigerators and washers, which helped our top line growth. Third is in line with the strategy of premiumization. Our premium portfolio, which is the front-load washing machine and the aircon business has done pretty well and which also aids given that these are high-value products and higher ASP products, aids in the top line growth. And last but not the least, in this quarter, we took multiple price increases to combat or mitigate the impact of the war-led commodity inflation. And as a result and a combination of all these four factors, we delivered a revenue growth of, a record revenue and a double-digit growth of 11.4%. So quite happy to see the momentum on the top line and the market shares. But when it comes to profitability, it's been a challenging quarter for us. The EBITDA came in at INR 120 crores at 4.6%, and we saw a squeeze of margins wherein EBITDA margins squeezed by 377 basis points. And we delivered profit before tax of INR 120 crores at 4.6%. And again, the profit margin squeezed by about 320 basis points versus a year ago. Why was there a squeeze on the profit margin? So specifically this quarter has seen an unprecedented cost increases on account of the geopolitical instability and the Middle East war. As you would have seen the crude oil prices, which similar time last year were operating at $67 are now operating at $97, at least in this quarter. And hence, there's a material impact of that on various raw materials and the components which use, which are driven from oil, and that has impacted our cost. Second big impact came from the currency. Same time last year, we've seen over one year, the currency has depreciated by more than 10%, which in a usual year would be around 4% or 5%, and that has also led to a material impact on all the commodities because: A, we buy less than 30% of our products or the raw materials are imported, but then there are a lot of components which are indexed to U.S. dollar as well. Apart from these two things, there were other cost headwinds coming from the minimum wage revisions in Haryana, the labour cost inflation, which happened in Noida, the diesel rate increase and the war led premiums, which we had to pay in this quarter range to ensure that the supplies are uninterrupted and then the LPG, et cetera, et cetera, going up and all that kind of things. And so these are all unanticipated or not projected kind of increase. And then there was an anticipated cost of charges on account of the new energy regulations, which came at the beginning of the calendar year, which impacted RF and aircon portfolio. So to mitigate this impact, we took a couple of price increases in the quarter, but then the price increases were not sufficient enough to mitigate the 100% of all the cost increase, which is like a very different magnitude, which you saw in the quarter. And a result of this, there was a net under recovery and hence, the squeeze on margins. Our P4G program continues to do well. That's a program wherein we look at cost productivity across all lines of the P&L, the design productivity, the negotiation productivity or the indirect procurement productivity. So that efforts are on track, but that the impact of war and other items are significantly ahead to be mitigated because of either the cost productivity or the pricing actions. Slide 29. On Slide 29, this talks about our consolidated performance. On a consolidated basis, we delivered a top line growth of INR 2,727 crores in this quarter, again, a double-digit growth of 12.1%. We delivered an EBITDA of INR 139 crores at 5.1% and delivered a PBT of INR 139 crores at 5.1%. Again, on a consolidated basis, we saw a similar margin squeeze of about 300-plus basis points. The highlight on a consolidated basis is our Elica business. That continues its robust performance and delivered a double-digit 26% revenue growth and a PBT growth of 22%. Thank you. With this, I will hand it over to Ms. Sweta for the Q&A section.

Thank you, Mr. Eswar and Mr. Jain. I would now request the moderator to open the Q&A session.

[Operator Instructions] The first question is from Atul Mehra from Motilal Oswal Asset Management.

Sir, just to begin with want to understand with the recent refinancing that the parent has done kind of taking care of their near-term till 2028 liquidity requirements. So what is the likely impact that can have on us, if any? And any particular thought process on the remaining stake that they want to sell? Anything on these two counts that you can help us with from the perspective of parent balance sheet improving and consequently, their thoughts around India?

Thank you, Mr. Mehra. I'll give you a very straightforward and honest answer to that question. I know as much as you do on this topic. Ever since the stake of Whirlpool Corporation went down to below 50%. We're at 39.75% now. The way we are working is that, and this is for all our shareholders and investors to know. The way we are working is completely at arm's length. We do not report or discuss any business matters with them at all. The only forums that we have to have the discussion, the technical team does that is there is a technology licensing forum where we look at new products that could be in the pipeline. And then we take a look at which of those new products could be interesting for us to take in the pipeline, which is part of the agreements that we have. And the second is we have a brand and quality forum where we give them an update on what's happened in the past in the brand, nothing to do with the future. What's happened in the past with the brand in terms of following all of the technical guidance and the legal requirements and all of that stuff. Similarly, on quality, we just give them an update on if there's any major or significant issues that they need to know because these are the only things that actually at this point in time matter to them as somebody who has given us their license. So I honestly have zero understanding of the refinancing implications. Neither have I reached out nor has anybody in my company reached out to understand that, nor do I have any idea of what they're going to do, are they going to sell, not sell, et cetera. I depend on the same information that you depend on, which is whatever is released in the quarterly reports by the Global CEO of Whirlpool.

Got it. That is clear. Sir, secondly, on one of the questions we have discussed in the past as well on the capital allocation. from the perspective that the cash that we have on the books is highly sizable. So if you can update us on any further developments, deliberations that the Board has had on this particular aspect, given the quantum of money that we are sitting on the balance sheet is quite large. Any progress or any conversations that you can enlighten us with on this particular aspect since it's an important aspect from a shareholder perspective?

Yes, certainly. It's a great question and one that's been asked of me a few times. So the Board also is very, very cognizant of that. So I can tell you that within the next 12 months, we need to have a complete blueprint of, and that is what we need to do of what we need for manufacturing capacity increases, what we need for manufacturing new products, which we are accelerating all resources is basically local and whatever else is contractually agreed with the corporation in terms of their support. So we're increasing the speed of our pipeline. So there will be capital required for that as well. Then on top, automation in our plants, which is an area that we really want to invest in. That's on the existing business. So new products, capacity increase automation. And then on top of that, we are also looking at inorganic opportunities. I will not be able to say anything more about it at this point in time. But this is an area certainly of interest to us because we do believe that we now have a very good pipe in terms of execution. Our businesses, while highly, highly competitive and we're not complacent at all about our position, we are getting relatively stronger in terms of how we execute, whether it's in sales or in service or in production or engineering. And therefore, inorganic opportunities, the next 12 to 15 months would be absolutely the right time. So I can openly tell you that within the next 12 months, I need to have a very clear plan on how to utilize the cash, including any other options, which I don't want to get into the detail, but whatever I'm not able to use, then there could be other options for that as well. I hope I answered your question.

That makes sense, sir. And finally, sir, we have done a commendable job on market share gains across categories. Having said that, like you mentioned along the quarter, you have taken some price increases. So can you give us a little bit more in terms of thoughts on when do we kind of fully be able to pass on these price increases so that the margin outlook improves from here on. So anything as a path towards that in terms of the management, how do you think about it and what are the further actions we are taking to improve the margins in conjunction with like market share gains that we've already.

Yes. Again, very good question and obviously, one that plagues us all the time. The price in this industry, I think, has been a bit different from many other industries in India, where they have priced the other industries individually, obviously, companies by themselves have priced to account for the inflation of commodity pricing. And that has not been the case as far as I can see in this industry based on market pricing that we observed. Now there is always, as you know, a big tension between raising the prices and whether you are still price competitive or not. If you recall, in 2022, you know very well, I've explained to you before that we took up the prices unilaterally, whether or not others would follow because we thought it was the right thing to do. And that resulted in a crashing of market shares. It resulted in a lot of loss of customer confidence, consumer confidence, et cetera. So the answer to your question is the price increase that we can take is going to also, at some point in time, be not only based on what we want to take, but also what we are able to take. And if our key competition does not take the price increase, then it would be a bit foolhardy for us to just do that to recover margins because in this business, having volumes does not guarantee of profits, but not having volumes almost certainly guarantees failures. So this is a very delicate balance. I am fairly, as you know, price changer every month in this industry compared to other industries like FMCG, where I worked there, which used to change once or twice a year. This literally changes every month. You could have different pricing for DC, you could have different pricing for FF. You could have different pricing for semi-automatic every month. So we are completely on top of that mail. And we will do the right thing for our business basically, always balancing between volume, market share profitability. All of these have to be managed a little carefully. And at this point in time, our priority is to make sure we don't lose on all fronts. I think going forward, July, August, September, to answer your question, will continue to be very challenging because very simply, we are a refrigerator, air conditioner company is more than 2/3 of our revenue. And this is the weakest quarter for refrigerators and air conditioners. But the commodity costs are very high. The ForEx is very high. So all the negatives will still stay, but the volumes in JAS will not be as strong as, nowhere near as strong as the volumes we had in AMJ. It grow versus a year ago, for sure, but absolutes will be lower, right? So I think it is going to be a tough quarter financially in JAS. My suspicion is it will be tough for the entire industry because everybody is more or less in the same boat unless they're selling very different products. So JAS is the weakest quarter typically for this industry. And then hopefully, after that, I am genuinely hoping that there is some end to this, like all of us are for humanitarian reasons, more than financial reasons. There is an end to all of this, and we can get back to a normal lives and hopefully normal costs pretty soon, which will help a lot. I hope I answered that question.

We take the next question from Rahul Agarwal from Ikigai Asset Management.

Pardon me, but I had three questions, but very quickly, on revenue growth, double digit, good achievement. A lot of factors have driven that, as Aditya explained. But for the full year, if I look at the full year, right, there are certain partial price hikes still to be taken. Is the full year revenue growth just looking at the current 11%, 12% range? Or it's going to be like some 15%, 20% purely because AC Elica growing upwards of 20% and then you'll also have to take some partial price hikes, if possible? That's question number one. Question two, related to the earlier question on margins. The way I'm looking at it is, of course, gross margin levels will be down on a Y-o-Y basis for the full year. But can we do some cost engineering? And can we have OPM, the Operating Margin flat on a Y-o-Y basis, 6%, 6.5% something what we did last year? Is that a possibility? And thirdly, on the CapEx side, as you said, you're planning to do a blueprint. But just in terms of capacity for ref and washers, what would be that at end of June? If you could just clarify that? What is the CapEx budget for '27? And in case if there is more capacity which is coming in for these products, how will Whirlpool India look like at end of March '27 for ref and washers on capacity? These were the three questions. Thank you.

Thank you, Mr. Agarwal. I'll try to answer these, and I'll defer to Aditya for the capacity for the CapEx budget question. Full year revenue, sir, at this point in time, it's so difficult. You ask anybody in the industry. So difficult to predict what the numbers are. Now what I am really hoping is that we will be able to get good revenue growth and hopefully market share gains across the year. That's what we are driving towards. But what the market will grow at is very difficult to predict. because there's a lot of impacts. The impacts of all the cost increases is also on the common man. We cannot forget that, that common man is paying more for many things right now. The government has done a fantastic job of reducing GST rates on consumer goods and televisions above 32 inches and air conditioners and so on and so forth, quite a few. But then this stuff has come on top, which is obviously, there was a help from one side and then a hurt from this ongoing stuff. So I would say without exaggeration that even now, we are literally figuring out how to manage on a month-on-month basis in terms of production, in terms of availability, et cetera. We are not out of the woods as an industry on all of these things. Any mishap anywhere can actually make a huge difference. So let's say, the accuracy of anything that I say would be close to zero. So all I can tell you is that to all our shareholders, we are focusing really hard on making sure the hard fought gains we have on market shares don't go away. We are trying to do it in a way that's financially responsible, but it is not a great year for margins for the reasons that I mentioned. You hardly ever have the perfect storm of significant de-waste increase, massive refrigerator and air conditioner regulatory change, which costs crores and crores and crores of rupees. And at the same time, this kind of impact on commodity prices and ForEx. This is like a black swan event in my view. And so we have to just somehow tide through this black swan, but we need to keep our operating parameters, and that's what I would like to reassure you, Mr. Agarwal. We will keep our operating parameters, whether it's net working capital, whether it's our execution focus, whether it's our ability to take new products into the market strongly. we are going to keep extremely tight on that so that when the bad times are over or the tough times are over, whoever has been very kind of disciplined, my experience across the world is that they benefit when those tough times are over. On your second point on GM, can we keep the margins flat? I absolutely will not be able to comment on it for the same reason. If it all depends on when and how fast these issues that I spoke of, which are extraneous solve themselves. Like I said, it will be a challenging year for all of us basically in the industry. And I don't see any immediate solutions because predicting this is completely impossible for anybody to do. On the CapEx budget, I'm happy to...

And Mr. Agarwal, thank you for your question on CapEx. And as we've indicated in the past, given the amount of cash we have on the balance sheet, so budget is not a constraint for us when we're taking capital decisions, honestly. What we're looking at is the right project, having the right ROI and the right financials. So if the project it makes the right financial sense, we are very pleased to go ahead with those kind of CapEx projects. So hence, probably it's not the budgetary constraint or a budget which drives us while taking capital decisions, but it's all about the right projects. Also, secondly, to your point on capacities, for example, as we've indicated, in the past as well, our capacity on an annual basis across all products is about 70%, 75% utilization. So there is no immediate requirement to put a large CapEx. immediate, I mean, the short term, let's say, next 6 months, 12 months to a large capacity CapEx. But we have a very stringent, very strong ongoing process wherein we keep evaluating our capacity requirements based on our estimates for the next couple of years. And that is a part of our normal planning and capital budgeting process. And that is a part of our run rate CapEx, et cetera. So our intent statement is, as Mr. Eswar has also explained that we are looking at the full blueprint, we're trying to accelerate the new products or the innovations. For example, we've invested in 4-door refrigerator. There are more models which are expected to come in the balance of the year, et cetera, et cetera. So, we are making sure that we are investing cash and CapEx in the right projects. without looking at any budget as a constraint. Hope that clarifies.

No, that clarifies actually, what I was asking was, obviously, it's not a constraint. We know that your balance sheet is supportive enough to incur the CapEx. What I meant was what is the cash outflow for CapEx budgeted for fiscal '27? That's the number I was looking for. And second was just to quantify the number of units and washers number of units, which the company currently has across three factories. That's what I was looking for.

So Mr. Agarwal, as you will appreciate that we are constrained to give the exact numbers, calling out exact numbers. So we're really constrained in sharing that piece. But just to give you comfort that we will be in line with the run rate is where it is, subject to the new products, et cetera, because that we are evaluating on a constant basis. If a new idea which comes right now to say that there's something which could be turned around in six months and it's a very valid, which is a very good idea from a marketing standpoint and makes a good financial sense, we are happy to take those kind of calls as well. So it's very difficult to pinpoint the number to say that this is what we're looking at from an exact number perspective. But yes, the base ongoing CapEx is about funds plus we keep investing based on specific initiatives, innovations, automation, et cetera.

The next question is from Rahul Jha from Bowhead.

So my question is that we have done really good on the front load washers and this is despite us being not present in Chroma with sales and Reliance with this project product at least from what I have seen. And despite that, we have gained significant market share. So my question is that how soon do you think we can enter with this product in the larger chains? And what sort of timelines do you expect us to hit the 10% kind of market share for front load washers?

Okay. Thank you for that question, sir. Well, without getting into specifics, we are in some of these large chains. As you know, the whole process of listing and delisting keeps going on. That's something that chains also do as part of their work. And obviously, our intent is to try and be in all these so long as it makes financial sense for us to do. So, one thing that we try to do is we don't try to just do, pay whatever is required to go and get it listed. I don't think that's a very good way of working. So where it makes commercial sense, then we will do it. And where it doesn't, we will keep discussing until it makes commercial sense to both parties. So, what we're looking for and not get in at any cost because then there is a financial also to worry about. So that process is ongoing, and we'll continue to do that. Like you rightly said, we are able to really get significant throughput increases on our front load, which is what makes us happy. Distribution increase is something that you can always get. But in the places where you are, your throughput, that is how much sales per display unit, that needs to increase. That's what gives confidence to our customer partners. There are actually parts of the country, I don't want to go into the detail, where we are already at close to a 10% volume share. As you can imagine, we've got about a five-odd volume share right now, but it's made up of some places where it's smaller, 3%, et cetera, and some places where it's close to 10%. So, we have the template, the KPIs. We understand what we need to do to make it happen. And like I said, it's always a question of doing the right thing commercially. Sometimes the commercials do not work, and that is something that we don't like to compromise on. So if we wanted to get one share at any cost, honestly, we could do that within a year's time. But I think the cost would not be a good cost to pay for the long run. So we are pacing ourselves, obviously, still with an aggressive bent of mind. It would be lovely to get to double-digit volume share in the next two to three years, that would be great. But let's see. Let's see. It's not an easy market. It's a tough market. Those who have the shares obviously hold on to it for their life. So it's very competitive and very exciting.

Second is, sir, on competition in the top load washer category, we have seen some of the erstwhile players who did not have that category with them, they have also entered. And is that the reason that we have lost some market share in the top load and despite losing some in the base quarter as well? So, because top load used to be a very strong product from Whirlpool, at least that's what the feedback is.

It's a fantastic question, actually, and it shows great knowledge of the market. So, thank you for that. Yes, to some extent, the competition in top load, as you rightly pointed out, more players have come in and very aggressively to try and get some share, especially at the lower end. We are sticking to our strategy. And very simply, it is to make sure that we grow responsibly financially, right? So the growth is not coming at the expense of financials. At the same time, we premiumize so that it's better value per unit for us and for our customers, and it's also a better margin per unit. So, we are definitely driving the premiumization through our high DCM strategy. And lastly, I think what I'm most excited about is, as I have said before, the specialty, I think, of Whirlpool, which we are, let's say, rediscovering our mojo is we don't just rely on great global innovation. Like I just said, we have obviously access to all the global innovation we need. But classic example, Dynamix detergent dispenser is not available anywhere else in the world except India, right? And tomorrow, it would go to other parts of the world, but it was made in India. Auto defrost made in India, made for India. The Intelli Crisper that we've just built in on the 4 door Luxuriem made in India. And I think what I would love to say is that in the next 12 to 15 months, I am looking forward to some very exciting innovations that we are bringing in on top load, which will, so our answer is not to undercut down price and try to win because that's a muds game. That is not good for the industry. Just like in semi-automatic, we decommoditized the business. Now if more players are coming in at lower cost and selling at entry level, et cetera, we have to find a way to decommoditize categories. That's what adds value to consumer. It adds value to our customers, and it adds value to our industry and to ourselves. So we will absolutely do that in top load washing machines as well. So there will be some very cool stuff that will come up before, let's say, too long.

One more question, if I can ask. So when do you plan to increase capacity on the front load washer because with the scale that we are, the growth trajectory that we have, we would be hitting, I think, capacity limits maybe next year in that?

No. So that's not a problem. And we do something called long-term capacity planning, which is a very structured program that we do. And we do that every year and update it every six months if we need to. We are completely on top of what we need to invest in from a capacity point of view in all our six plants. We always look at can we do it internally, can we do it externally, et cetera. As far as front load is concerned, we are quite cool. We are growing really fast, but there's still significant capacity that we have to utilize. And we don't even operate on three shifts. So there's a lot of, let's say, space that's available to basically make it much bigger volumes. So, there's no immediate need for any capacity investment in front load. But we're always on top of that, sir, as you can imagine.

The next question is from Ankit Merchant from Kotak Securities.