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The stock of consumer durables maker Whirlpool of India has rallied 30 per cent since its September quarter results announcement on October 31.
A strong performance in the quarter with sales growing 21 per cent year-on-year and profit more than doubling triggered the run-up. The stock received a boost last Thursday following the company’s guidance that it aims at growing revenue 2.5 times over the next three years.
While a low base due to a poor show last year helped, pick up in demand and increase in sales of high-end products also buttressed growth in the recent September quarter. Operating margin at 9 per cent was up almost four percentage points over the last year period.
The better margins were on outcome of better pricing and change in product mix. It helped that Whirlpool’s numbers were much better than the industry’s. The IIP Consumer Durable index declined 11.3 per cent in September, compared with the same month last year. This followed declines in August and July too.
With the base effect benefit wearing off now, Whirlpool’s sales numbers in the December quarter will show whether the revival in demand is tentative or on firm ground.
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