Whirlpool pdf

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INDUSTRY ANALYSIS OF
HOME APPLIANCE SECTOR IN INDIA
AND
EQUITY ANALYSIS ON WHIRLPOOL OF INDIA LIMITED

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AUTHORIZATION
To,
The Director
IBS
Respected Sir,
I the undersigned hereby declare that Industry analysis on Home Appliance Sector and Equity research on
Whirlpool of India has been done by me in the academic year 2014. This research has been done under the
guidance and supervision of Prof. Satyaki Ray, IBS Kolkata and Company guide, Mr. Ajay Jaiswal in
total fulfillment of the requirements of the Post Graduate Program in Management (PGPM) at IBS,
Bangalore.
I declare that this project is the result of my own effort and has not been submitted to any other institution
for the award of any degree or excellence.
Date: 30/05/2014 Rahul Chitlangia
Kolkata 13BSP0609

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ACKNOWLEDGEMENT
I am greatly thankful to Mr. B.L Mittal Chairman of Microsec Ltd for inculcating in me the virtue of
wisdom and hard work for MBA in general and life in particular.
I would like to express my gratitude to Prof. Satyaki Ray for providing his valuable time & Mr. Ajay
Jaiswal for providing challenging platform in order to sharpen my thought process and teaching me the
concept of detailing.
Lastly, I would like to thank ALMIGHTY, my grandmother Late Jetha Devi Chitlangia and my parents
for their support.

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INDEX
SR.NO PARTICULARS PAGE NO.
1. Executive summary 6
2. Consumer Durables – An overview 7-9
3. Key drivers towards the growth of the sector 10-13
4. Whirlpool Incorporation – A brief overview 14-20
5. Whirlpool and its global positioning 21-23
6. Whirlpool of India Ltd.- A brief overview 24-31
7. Peer Analysis 32-39
8. Valuation 40-48

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EXECUTIVE SUMMARY
TITLE:
Industry analysis on home appliance sector and Equity analysis of Whirlpool of India Ltd.
OBJECTVE:
The objective is to understand the home appliance sector giving primary focus to Whirlpool of India Ltd
and then analysing its financials so as to find out the valuation of shares in order to recommend whether to
buy or not and to find out whether the shares are overpriced or under priced.
SCHDULE:
 Week 1 : Study of Indian Home Appliances and Consumer Durable Sector.
 Week 2 : Study of sector with respect to Global Markets.
 Week 3 : Study Whirlpool Inc and its Poisoning in USA and India.
 Week 4 : Study Whirlpool India Ltd
 Week 5 : Preparation and Submission of Interim Report.
 Week 6 : Study of the existing product line, New Products launched in the past two years
and Products Scheduled to be launches in the next two years.
 Week 7 : Study financial for the past 5 years so as to find out the change in Sales,
Expenditure, Profits etc and the reason behind it.
 Week 8 : Analyzing the stock trend of Whirlpool India.
 Week 9 : Peer Analysis.
 Week 10 : Valuation of shares and Recommendation for Whirlpool India.
 Week 11 : Formulation of Final Report.
 Week 12 : Preparation and Presentation.
MEHTODOLOGY: I have been assigned the scope of wore and detailed schedule stated above which
have to be followed strictly. The daily work has to be submitted to a junior Analyst who guides me on the
daily work & then a weekly presentation has to be made to Mr Ajay Jaiswal Company guide.

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INDIAN CONSUMER DURABLE SECTOR
The consumer durables market is divided into two segments – Consumer electronics and Consumer
appliances (which includes Refrigerator, Air conditioner, Micro oven, Washing machine). In the initial
years, the sector relied greatly on media and advertising for consumer penetration. Accessibility to high-
end products was, however, low till mid 2000s. Last few years has seen high end and aspirational products
like air conditioners and High Definition TVs gained stronghold in the market. The share of revenue from
consumer durable sector in India is increasing due to government spending towards infrastructure and
rural electrification programme. In 1992 the Indian market first began to open up post liberalisation. The
penetration level of refrigerator was 18%, Washing machine was 6%, Air conditioners was less than 6%
and Microwave oven was less than 1% translating a potential market for new customers and building
respect of this sector among the others. Since then the entry of global players like LG, Samsung,
Whirlpool and others started. Share of Consumer durable market in India:
35%
65%
Market Share
Rural
Urban
E-commerce is the fastest emerging business nowadays and currently the industry is worth $10
billion. According to a report by Google maximum online buying is in the hands of consumer
durables which accounts to 34% of the total market. While 50% of the E-commerce sale happen
in non metro city depicting the acceptance of E-commerce web city’s in tier 3 and 4 cities.

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The Industry Size of consumer durables in India stands at 350 billion (as on 2012). The sector is
marked by stiff competition between the players due to launch of new models, discounts and
schemes. The top 5 states in India in this sector (revenue wise) are:
1. Maharashtra
2. West Bengal
3. Utter Pradesh
4. Kerala
5. Gujarat
The market share of MNC’s is 65%.The primary target of the MNC’s is the lucrative middle
class because products like Air conditioner, Washing machine and Microven are no longer
considered as luxury item.
Source : Euromonitor India Consumer Appliance Report 2013,
http://www.adlittle.com/downloads/tx_adlreports/Consumer_appliances_report.pdf
31%
10%
6.80% 5%
0%
10%
20%
30%
40%
Refregerator Washing Machine Air condioners Micro wave
Penetration level of Consumer Durables

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WHITE GOODS SECTOR
Air Conditioners:
The Indian Air Conditioners market
accounts to sale of 3.6 million units in 2013.
Air Conditioners have a market penetration
of 6.8% including window and split Air
Conditioners. The segment has 13% market
share in consumer appliance segment. The
room Air Conditioners represents 50%of the
total market and other 50% comprises of
central and specialist Air Conditioners The
room Air Conditioners is further divided
into sub segment. On one hand residential
segment which constitutes a majority 60%
market Share and commercial segment
constitutes a minority of 40%.
Microwave Oven
Due to convenience of mobility and ease of
operations freestanding microwave oven
continue to dominate the Indian markets.
89%
72%
53% 50%
8% 7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Household
penetration of Air
Condioners
4.8 5.8
7
8.6
10.6
13.3
15.5
0
5
10
15
20
2007 2008 2009 2010 2011 2012 2013
Market Size of
Microven
(in INR Billion)

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Refrigerator
The refrigerator sales stood at 14 million
units in 2013.this segment makes up 18% of
consumer appliance market. The market
share of frost free and direct cool are 76.4%
and 23.7%. Fridges with capacity range of
143-340 litters dominate the market
representing 74% of the total sales volume.
28.3
33.9
41.3
48.6
57.1
67.4
74.2
0
20
40
60
80
2007 2008 2009 2010 2011 2012 2013
Market Size of Refrigarators
(In INR Billion)
Washing Machine
It is the second largest contributor to
consumer appliance sector. In 2013 the
sales of washing machine in India was 7.5
Million units. The major chunk of growth is
seen because of household replacing the
semi automatic machine with fully
automatic machine. 6-9.9 Kg is the most
popular category in India with 72.2% share.
23.6
29.4
36.9
47.3
58.5
73.1
87.4
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013
Market Size of Washing
Machine
(in INR Billion)
Source : http://www.adlittle.com/downloads/tx_adlreports/Consumer_appliances_report.pdf

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GROWTH DRIVERS OF THE SECTOR
Increase in organized retail
According to Aranca research report on Winning in Indiasretail sector currently India constitutes only
8% of organized retail and remaining 92% is left unorganized organised but the organised reatil is
expected to grow to 20% by 2020. Growth in various reatil formats are shoen below:
Source: http://www.ibef.org/download/Retail-March-2014.pdf
Favourable demographics: According to CIA world fact book the age structure of India are as follows
0-14 years- 28.9%
15-24years-18.2%
24-54 years-40.4%
55-64 years-6.9%
65& above – 5.7%
This shows that approximately 68% of the total population is in working class category which would
certainly drive growth in the sector because consumer durables are emerging as a necessity rather
than a luxury. So as India’s major population is under working class they would fulfil the demands of
the necessary consumer durables leading to show a boom in the sector. With this favourable dynamics
India is one among the largest consumer markets in the world.
Source: http://www.indexmundi.com/india/demographics_profile.html

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Consumption Expenditure
According to BCG India consumer survey 2010 the expenditure on consumer durables is between 4-
5% of the total consumption irrespective of the diversity of income. This shows the potential of the
sector & its long term growth opportunity
Source: The Marketing White book.
E-commerce-
Apart from tradional & organised retail, E-commerce is emerging retail format because the
consumer gets the option of comparing and buying from the 24 hour open online retail store.
Consumer durables accounted for 7.8% of the total 47349 crore E-commerce market in 2012.
Source:http://yourstory.com//wp-content/uploads/2013/05/Digital-Commerce-Report_2013.pdf
Increasing Urbanization
Easy financing schemes

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Financing schemes
It enable customers, especially those with lower income levels, to use future income streams to buy
consumer products upfront and pay in installments over a period. Consumer durable goods purchased
under financing schemes are shown below:
Source:http://www.thehindu.com/business/consumer-durable-financing-interestfree-schemes-gain-
popularity/article4253297.ece
Source:http://www.thehindu.com/business/consumer-durable-financing-interestfree-schemes-gain-
popularity/article4253297.ec

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More than 85% of growth is expected from Asia Pacific.
www.mckinsey.com

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WHIRLPOOL INCORPORATION
Brothers Fred and Lou Upton and their uncle, Emory Upton, founded
the Upton Machine Company, manufacturer of electric motor-driven
washing machines, in 1911 in St. Joseph, Michigan. Sears, Roebuck
and Co. began buying their products five years later, and by 1925 the
company was supplying all of Sears' washers. The Uptons combined
their company with the Nineteen Hundred Washer Company in 1929 to
form the Nineteen Hundred Corporation, the world's largest washing
machine company. Sears and Nineteen Hundred prospered during the
Great Depression and during WWII Nineteen Hundred's factories
produced war materials. In 1948 it began selling its first automatic
washing machine (introduced a year earlier) under the Whirlpool brand.
In 1950 the company changed its name to Whirlpool following the
success of the product and introduced its first automatic dryer. During
the 1950s and 1960s, Whirlpool became a full-line appliance
manufacturer while continuing as Sears' principal Kenmore appliance
supplier. In 1955 the company bought Seeger Refrigerator Company
and the stove and air-conditioning interests of RCA. Three years later it
made its first investment in Multibras EletrodomÚsticos, an appliance
maker in Brazil. (It has increased that investment over the years.) Other
purchases included the gas refrigeration and ice-maker manufacturing
facilities of Servel (1958); a majority interest in Heil-Quaker, makers of
central heaters and space
heaters (1964); Sears' major television set supplier, Warwick Electronics
(1966); and 33% of Canadian appliance maker John Inglis Company
(1969). It made a deal with Sony in 1973 for the distribution of
Whirlpool-brand products in Japan. Whirlpool sold its TV manufacturing
business to SANYO of Japan three years later.
Institutio
nal
91%
Others,
9%
Currentmarketprice $150
$160
$107.8
$11.63
Share holdingpattern
MarketData
52Weekhigh
52weeklow
Marketcap(billion)
WhirlpoolCorp
WHR
WHR:US
WHR.N
77Million
$1
1.82
Consumer Durables
Stock Scan
Script Id
Script Code(NYSE)
Bloomberg Ticker
Reuters Ticker
Outstanding Share
Face Value
Beta
Industry
Meaningbehindthe Logo
The ringencerclingthe logodenotesthe
commitmenttowardsquality

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Between 1981 and 1991, despite a static US market, Whirlpool's sales tripled to almost $6.6 billion. In
1986 the firm bought top-end appliance manufacturer KitchenAid (from Dart and Kraft) and 65% of
Italian cooling compressor manufacturer Aspera. Also that year it sold its Heil-Quaker central heating
business. David Whitwam was appointed CEO in 1987. Whirlpool took over total ownership of Inglis in
1990. The company formed Whirlpool Europe, a joint venture with Philips Electronics, in 1989; in 1991
it bought out Philips. Two years later Whirlpool took control of appliance marketer SAGAD of Argentina
and entered a joint venture with Slovakia's Tatramat (which it bought out in 1994). Whirlpool acquired
control of Kelvinator of India in 1994 and formed a joint venture in China with Shenzhen Petrochemical
Holdings in 1995 to produce air conditioners. The following year Whirlpool merged its Whirlpool
Washing Machines and Kelvinator of India companies to form Whirlpool of India. The company's
European division plunged into the red when competition and a recession kept consumers away from its
higher-priced appliances. In 1997Whirlpool initiated a restructuring (due to losses from its foreign
operations) that included plant closures and substantial layoffs (as much as 10% of its workforce). The
next year Whirlpool sold its appliance financing subsidiary to Transamerica. The company also began
using a new, more efficient product development model in 1998, similar to one used in the auto industry.
In 2000 Whirlpool launched the Cielo Bath line of jetted tubs, and in 2001 it introduced the Calypso
dishwasher and the Duet washer and dryer. Another global restructuring plan swept through the company
in 2000, resulting in significant pretax charges ($373 million, incurred in 2001 and 2002) and the
elimination of about 6,000 employees by October 2003. In February 2002 Whirlpool bought the
remaining 51% of Vitromatic it didn't already own. (Vitromatic -- the second-largest appliance
manufacturer in Mexico -- is now called Whirlpool Mexico.) In March the company purchased 95% of
Polar, Poland's second-largest appliance maker. Whirlpool introduced Gladiator GarageWorks (modular
storage systems for the garage) and Polara (the first electric range with cooking and refrigeration
capabilities) in 2002. Whirlpool acquired Maytag in early 2006 for about $1.9 billion. The deal added
several top brands to its already bulging portfolio, including Admiral, Amana, Jenn-Air, Magic Chef, and
of course, the eponymous Maytag. Once the dust settled, Whirlpool sold several businesses, including
Dixie-Narco, the Amana commercial business, its Hoover unit to Techtronic Industries, and its Jade unit
to Middleby Corporation. Buying Maytag also spurred Whirlpool to streamline operations and purge staff.
In 2006 it laid off some 4,500 employees, consolidated duplicate functions related to administration and
manufacturing, and shuttered some offices, including a Maytag research and development center based in
Newton, Illinois. Whirlpool shuttered Maytag's Iowa-based administrative offices and moved them to
Michigan and other locations. The company cut 700 jobs at several Tennessee plants the following year.
In 2007 Whirlpool acquired a minority stake in Elica Group in its effort to extend its reach into the global

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air ventilation market. The company formed a 50-50 joint venture in 2008 with China's Hisense-Kelon
Electrical Holdings to make and sell home appliances there. In June 2010 Whirlpool closed its refrigerator
factory in Evansville, Indiana; some 1,100 US jobs were lost as a result of the move. The Upton Family
believed "there is no right way to do a wrong thing" which still exists in the Whirlpool roof leading to
foundation of a 100 year old company. Whirlpool contributes to building unmatched levels of loyalty
through lifelong relationships with its customers. Focused on embedding innovation as a core
competency, Whirlpool Corporation has made a long-standing investment to build this competency. This
investment includes redesigning business processes, training thousands of employees, building an
innovation management system and changing the culture of the company The Whirlpool brand is the
world’s no 1 Global Appliance Brand. Major customers of Whirlpool include retailers Lowe's, Home
Depot, Sears, and Best Buy. Operations Whirlpool organizes its business segments by product line:
Laundry Appliances, Refrigerators and Freezers, Cooking Appliances, and Other. To this end, net sales
generated by each of these segments are well-distributed. North America accounts for more than half of
its sales. Geographic Reach Whirlpool's largest markets are North America and Latin America. In North
America, it sells some products to other manufacturers, distributors, and retailers for resale in North
America under those manufacturers' and retailers' brand names. Whirlpool also boasts a significant
presence in Europe and India. In 2012 Whirlpool opened a new $200 million manufacturing plant in
Cleveland, Tennessee. The 1 million-sq.-ft. facility, which is the world's largest premium cooking plant,
produces cooking products, including ranges, ovens, and cook tops. Previously, the company reopened a
500,000-sq.-ft. factory in Ottawa, Ohio, that it had acquired from defunct Canadian appliance maker W.C.
Wood. Whirlpool also sells home appliances in China through a strategic alliance with Suning Appliance
Co., Ltd. Financial Performance Thanks to the unfavorable impact of foreign currency and lower unit
shipments, Whirlpool logged a 2% revenue decrease in fiscal 2012 as compared to 2011. These declines
were not offset, however, by favorable pricing and product mix. During the same reporting period, the
company generated 48% of its sales from outside North America, including 27% in Latin America, 16%
in EMEA, and 5% in Asia. Revenue in these three regions caused declines for Whirlpool due to the
impact of unfavorable foreign currency. Profits rose nearly 3% in 2012 vs. 2011 as a result of the
company's aggressive 2011 initiative to reduce costs and improve productivity. Whirlpool was further
boosted by a $133 million income tax benefit it received during 2012. Strategy The company is looking to
improve its operating margins and earnings by implementing cost-based price increases, initiating cost
reduction efforts, and making productivity improvements. The company shuttered its refrigeration
manufacturing facility in Fort Smith, Arkansas, in mid-2012. In Germany, Whirlpool relocated its
dishwasher production facility to lower-cost Poland in 2012. These two closures are expected to result in

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$400 million in annual cost savings by the end of 2013. At the same time, these cost savings are intended
to give the company some flexibility as itmakes continued investments in new product innovation. Capital
expenditures for R&D related to new product innovation and improvement of existing products are now
holding steady after a few years of incremental increases, reaching approximately $553 million in 2012,
compared to $578 million in 2011, $532 million in 2010, and $500 million in 2009. Whirlpool is looking
for longer-term growth to come from certain emerging markets -- China and India in particular. In 2012 it
entered into a strategic alliance with China's Suning Appliance Co. to sell home appliances there. As part
of the agreement, Whirlpool enjoys access to some of China's smaller, fast-growing cities through
Suning's national distribution network of 1,700 retail outlets. In 2013 it's also buyin Sanyo Electric's 29%
stake in joint venture Hefei Rongshida Sanyo Electric Co.Ltd., based in Hefei, China. The move makes
Whirlpool a 51% shareholder and further strengthens its presence in sought-after China. Sales and
Marketing Whirlpool counts several big-name customers among its list of clients. It serves Meritage
Homes, Lowe's, Sears, Home Depot, Best Buy, Casas Bahia, IKEA, and Alno. In North America, the
company sells products to other manufacturers, distributors, and retailers for resale under those
manufacturers' and retailers' brand names.

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Source: Bloomberg, Hoovers Inc
Source: www.whirlpool.com
BRAND PORTFOLIO OF WHIRLPOOL CORPORATION

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WHIRLPOOL & ITS GLOBAL PROSPECTI

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WHIRLPOOL & ITS GLOBAL POSITIONING
In the late 1980’s Whirlpool began a series of acquisitions that gave the company the scale and resources to
participate in global markets. In the process, it established new relationships with millions of customers
globally. Whirlpool's global initiative focused on establishing its presence in North America, Latin
America, Europe, and Asia. Whirlpool acquired the appliance business of Philips N.V., which gave the
company a strong European operations base. Whirlpool expanded its long-time involvement in the Latin
America market and established a presence in Mexico as an appliance joint venture partner. In order to
cater to the needs of different markets, Innovation and new product development became the primary focus
of the company. Thus, to serve a huge customer band the company decided to Rethink, Rework and
Redesign so as to recognize the company into business units to create a more responsive environment to
deal with the competitive dynamics of the global Industry. Whirlpool had success in refocusing a number of
its key functions to the global approach. Procurement was the first function to go global, followed by
technology and product development. The two functions led to significant savings. More important, the
global focus has helped reduce the number of regional manufacturing platforms worldwide. The work of
these two functions, combined with the company's manufacturing footprints in each region, has led to the
development of truly global platforms - products that share common parts and technologies, but offer
unique and innovative features and designs that appeal to regional consumer preferences.
Procurement's Prerequisite:
Procurement became the first function to be structured as a truly global organization. Because of the scale
of operations Whirlpool became a very attractive customer for suppliers. A partnership with Whirlpool gave
the suppliers an opportunity to sell globally and also gave them efficiencies within their operations. They
don't have to design for different places in the world. The suppliers contacted with Whirlpool to serve all of
Whirlpool’s global needs. This gave whirlpool an access to the best technology and to the best people
globally. They obtained savings as a global player, as opposed to a company that had four separate

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businesses that come at a supplier in four different ways. Whirlpool's global procurement approach
complements the global development process. They purposely placed procurement within the Corporate
Technology Organization for two reasons:
 First, to marry procurement with technology so that they could obtain value at the front end of
design
 Second, to operate as a global unit so as to drive global design from region to region, category to
category, commodity to commodity.

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PRODUCT DEVELOPMENT
The global product development structure and process allowed Whirlpool to rapidly migrate innovative
consumer solutions from one part of the world to another. For example, the units in Brazil manufacture
refrigerators with innovative features and designs that appeal to consumers worldwide. The region exported
these refrigerators to Europe
Before the globalization of product development took place there were multiple platforms in each product
category, little feature leverage, multiple technologies with wide performance variations, significant
technical resources to keep all of these platforms going, and long and costly product development. Today
they manage 60 percent of the commodities globally with fewer platforms. Global product development
cuts down the engineering costs considerably leading to consumer benefit.
The goal in global product development was to evolve quickly from regional platforms to a global
platform, while ensuring that they meet the unique set of needs of consumers in all the diverse markets they
serve. Through a transfer of technology and knowledge around the globe - the product reached the
marketplace faster.
Source: www.geplcapital.com

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WHIRLPOOL OF INDIA LIMITED
WIL was incorporated in 1960 by J R Desai in collaboration with
Kelvinator International Corporation, USA. The company entered into a
tie-up with Whirlpool Corporation USA whereby Whirlpool contracted to
purchase from White Consolidated Industries Inc, USA. Also, Expo
Machinery Ltd, a wholly owned subsidiary merged with the company.
Whirlpool Washing Machines Ltd merged with the Kelvinator India Ltd
and the company changed their name from Kelvinator of India Ltd to
Whirlpool of India Ltd. Whirlpool of India Ltd (WIL) is an 82.3%
subsidiary of Whirlpool Inc, US. In the year 2000, the company expanded
their product range by launching Air conditioners and Microwave Ovens
for the first time. WIL has its main plant at Faridabad in Haryana - to
manufacture refrigerators and freezers. The washing machine unit is
located at Pondicherry. In 1998, the company established yet another
refrigeration plant at Ranjangaon near Pune. The main product offerings of
Whirlpool are Refrigerators and Washing Machines. ACs and Microwaves
are the two other products which form the basket of offerings from
Whirlpool to the Indian market. WIL's export business has an excellent
volume. It is the largest exporter of home appliances from India. The 4
main pillars of Whirlpool are communication, product, retail and service.
It has been a pioneer in identifying innovations which are of operational
excellence and lead to cost reduction and at the same time offer better
quality. The offering of Whirlpool to the Indian market is its 6th Sense
“Frost Control”: Refrigerators which have a unique property of having
Frost Free features in a Direct Cool Refrigerator. This was a revolution in
the Indian Market. The company exports their product to Russia and East
European countries and exports small appliances to the USA. Today,
Whirlpool is the most recognized brand in home appliances in India and
holds a market share of over 25%.The brand ambassador of WHIL is Kajol
and Ajay devgan.
Source: ACE Equity
Current market price 232
244
141
2842
Whirlpool of India Ltd
WHIRLPOOL
Script Code(BSE) 500238
WHIRL IN
WHR.BO
126.87 Crore
10
0.91
Consumer Durables
Bloomberg Ticker
Reuters Ticker
Share Capital (INR)
Face Value(INR)
Beta vs Sensex
Industry
Stock Scan
Script Id
Script Code(NSE)
Market Data(INR)
52 Week high
52 week low
Market cap (Cr)
Share holding pattern
Forigen
promot
ers,
75%
FIIs,
7.01%
DIIs,
5.45%
Others,
12.54%

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PRODUCT LINE OF WHIRLPOOL OF INDIA LIMITED
1. Refrigerator
2. Washing machine
3. Air conditioners
4. Microwave Oven
5. Water Purifiers
6. Inverter
7. Induction Cook top
CONTRIBUTION OF PRODUCTS TOWARS REVENUE
62%
21%
7%
10%
Break up of Revenue
Refrigarator
Washing Machine
Air condioners
Others
Source: Annual Report

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BUSINEES INSIGHT
Whirlpool India Limited is revamping its product range with the highest ever launches in a year under
implementation in Financial Year 2014. New products host unique features better exterior design and
colours. WHIRL is reducing the revamp product life cycle (earlier a model used to be revamped every 3
years which has now been compressed to 1.5 years). It has also occurred an incremental expenditure of INR
400 million to upgrade the manufacturing capacity to cater to the new launches. The company expects to
have dominance in Refrigerator and Washing Machine to continue in near term. While Air conditioners,
Water Purifiers and Microwave Oven, which together accounts for 10% of the total revenue are future
growth drivers. Whirlpool India Limited has revamped its branding strategy to communicate an
International appeal.
DISTRIBUTORS INITIATIVE STRUCTURE
WHIRL has a strong distribution presence with a network of 3500 dealers across 150 towns. In line with
mass market focus to increase its presence, WHIRL plans to penetrate into tier-2, 3 and 4 towns so as to
increase the customer band. It in reworking on the distributor structure so as to provide trade margin’s in
alignment with the other peers. It has hired Boston Consulting Group to restructure its distribution model
which will be fully operative by the end of FY14.
IMPACT OF RBI’S NORMS ON DURABLE FINANCING
WHIRL’s revenue will not be much impacted by RBI’s new norms on consumer durable financing, which
mandates to show true interest rates instead of specifying 0% interest rate. WHIRL sales through consumer
finance route are only 7%, creating a very minimal impact.

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PRODUCT LINE OF WHIRLPOOL OF INDIA LIMITED
Refrigerator
 Single Door Refrigerator - MRP Ranging from 12150 -20875
 Double door Refrigerator - MRP Ranging from 22050-57850
 Multi door Refrigerator - MRP Ranging from 26625-55125
 French Door Refrigerator - MRP 150000
Washing Machine
 Fully Automatic(Top Load) - MRP Ranging from17250-24850
 Fully Automatic(Front Load) - MRP Ranging from 25000-33500
 Fully Automatic 360 - MRP Ranging from 28500-30100
 Semi Automatic - MRP Ranging from 9500-14500
Air Conditioners
 Window AC - MRP Ranging from 19000-33500
 Split AC - MRP Ranging from 58800-340000
Microwave Oven
 Crisp Range - MRP Ranging from 10290-19290
 Magicook 1-2-3 - MRP 8490
 Magicook Range - MRP Ranging from 5490-13890
Water Purifier
 RO Purifier - MRP Ranging from 15500-17500
 Non Electric Purifier - MRP Ranging from 5000- 6500

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Home Power
 Platinum Series - MRP 880
 Gold Series - MRP Ranging from 7000-11000
 New Silver Series - MRP Ranging from 4200-5500
Induction Cook top - MRP Ranging from 3790-5790
Apart from these core products Whirlpool sells accessory for all the above listed products.

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FOCUS ON INNOVATION & COST CUTTING
WPL concentrates on healthy margins rather than generating increased revenues. Only projects that will
provide company healthy margins are taken up. This is reflected in its operating margins which have
remained in the range of 7-9% last couple of years even after a tough 2012. WPL is tapping its core
competencies by heavy capex in growth and innovation. It has got global technology support and local
innovation through own design centre and has launched many innovative products like - next generation
refrigerator claiming 40% faster cooling than any other machine in the same category. This product has
got tremendous response from market. WPL follows a sensible approach toward advertising expenditure.
The company follows an ideology of minimum advertising expenditure, as things such as AC, washing
machines and refrigerators the consumers will only prefer buying the product after touching and having a
sense of the product rather than watching the advertisement. It has maintained its advertising expenditure
below 3% of sales in last 5 years. Having shown a major focus on cost cutting it has tremendously
improved its working capital management. It has maintained its employee costs between 7.5%-8.3% in the
last 4 years.
1511.6 1236.6
3123.4
3676.1
3499.2
0
1000
2000
3000
4000
2009 2010 2011 2012 2013
R&D Expenditure
( In lakhs)
2.65
2.85 2.8
1.85
1.67
0
0.5
1
1.5
2
2.5
3
2009 2010 2011 2012 2013
Advertisement Expense
(as % of Sales)
Source: Annual Report

- 29 -
Whirlpool’s share price was Rs17 in 2005 went up to Rs60 in 2008 and went on to touch a record high of
Rs338 in November 2010 due to continuous innovation brought into the products creating greater value add
to customers. Whirlpool added new products from premium to mass straddling multiple price points.
Whirlpools new innovative product line includes:
 Magicook1-2-3 Microwave oven.
 Frost free Refrigerators called Neo Ichill.
 Direct cool Refrigerators Ice magic.
 Line ups of Spilt Air Conditioners: 3D Cool and Chrome Turbo.
 Kitchen products comprising Built-In Ovens, Barbeque, Hobs and Hood.
 White Magic 1-2-3 nxt with new and advanced 6th Sense Washing Machine
PROPOSED INNOVATION & ADAPTATION
 Capacity expansion of Pondicherry plant.
 Accquision of a new export market (Australia).
 New energy requirements with minimal cost increases.
 Lumia launch with 7SKUs helped to increase volume.
 Use of environment friendly R-600a refrigerant in refrigerators.
 Variety of color options of washing machines for wider consumer choice.
 Introduction of French Door Bottom Mount Refrigerator for Indian markets.
 New range of refrigerators (242L to 480L 2-Door Frost Free.

- 30 -
INDUSTRY STRUCTURE & DEVELOPMENTS
The long term growth opportunity that India offers is attracting a number of international appliance
brands. Recent entrants include brands from Germany, New Zealand, Japan and China which is making
the Indian appliance industry more international in character. Joint ventures and strategic alliances are
being forged. Several new entrants are investing heavily behind brand, distribution and manufacturing.
For the moment however, the home appliance industry is highly concentrated, with the top 4 brands
accounting for more than 80 % of the appliance market. Category dynamics remain largely unchanged for
refrigerators and washing machines, where single door and twin tub formats dominate. The Air
Conditioner category has seen tremendous change with split air conditioners fast replacing windows.
Indeed, several brands are exiting the window business altogether. In the Microwave category, more and
more offerings are in the Convection and Grill models, which are more versatile products. An over
arching phenomenon is that premium segment of all appliance categories is seeing a lot of action. Today,
it is common to see multi-door refrigerators, sophisticated front-load washing machines, inverter
technology air conditioners, and Built-in products growing in awareness and distribution.

- 32 -
BLUE STAR LIMITED
Blue star is the largest Central Air condoning company with an annual
turnover of 2800 crore having 7 manufacturing facility, over 1800 dealers
and 2700 employees. It fulfills the AC needs of large number of corporate,
residential and commercial customers. Blue star has primary focus on
CORPORATE & COMMERCIAL MARKET. Having acquired great
success in the above segment it has penetrated into residential segment
also. The company also manufactures and markets a wide range of
refrigeration products which include water coolers, bottled water
dispensers, deep freezers and cold storage. It has heavily invested in R&D
to produce energy efficient products. Having set up strong R&D facility no
technology has been imported in the last 5 years.
BUSINEES SEGMENT
Blue Star operates in three segments:
1. Electro mechanical projects.
2. Cooling products.
3. Professional Electronics.
SEGMENT WISE REVENUE BREAK UP
Source: ACE Equity
Current market price 212.85
223.6
130.15
1419.2
Market Data(INR)
52 Week high
52 week low
Market cap (billion)
40%
32.85%
15.16%
9.04%
2.43%
Directors
Public
Foreign
institutionals
Foreign holdings
Blus Star Ltd
BLUESTARCO
BSE Code 500067
BLSTR:IN
BLUS.NS
8.99 Cr
2
0.8
Consumer Durables
Outstanding Share
Face Value
Beta vs Sensex
Industry
Stock Scan
Script Id
NSE Code
Bloomberg Ticker
Reuters Ticker
70%
23%
7%
Electro mechanical
project
Cooling products
Professonal Electronics
Voltas vs Sensex
74.40
94.40
114.40
134.40
154.40
174.40
194.40
29-Apr-2013
29-May-2013
29-Jun-2013
29-Jul-2013
29-Aug-2013
29-Sep-2013
29-Oct-2013
29-Nov-2013
29-Dec-2013
29-Jan-2014
28-Feb-2014
31-Mar-2014
CLOSE(Voltas Ltd) CLOSE(SENSEX)

- 33 -
VOLTAS LIMITED
Voltas is one among India's largest air conditioning company, and one of
the world's premier engineering solutions providers and project specialists.
Voltas Limited offers engineering solutions for a wide spectrum of
industries in areas such as heating, ventilation and air conditioning,
refrigeration, electro-mechanical projects, textile machinery, mining and
construction equipment, water management & treatment, cold chain
manufacturing units at Thane, Dadra and Pantnagar. Voltas established a
clear lead in AC sold in multi brand outlets in 2012-13 possessing 20%
share in these outlets. According to GFK Nelson market share of Voltas as
per revenue in AC segment stand at 18%.The AC segment is the highest
contributor towards profitability. It has plans to enter into Refrigerator and
washing machine segment in next 5 years.
BUSINEES SEGMENT
Voltas operates in three segments:
1. Electro mechanical projects.
2. Engineering products.
3. Unitary cooling products.
Source: ACE Equity
Current market price 165.5
176.25
67.2
2495.48
52Week high
52week low
Market cap (Cr)
Market Data(INR)
Promotrs
30%
Institutio
nal
Investors
47%
General
Public
17%
Others
6%
Script Id Voltas Ltd
NSE Code Voltas
BSE Code 500575
Bloomberg Ticker VOLT:IN
Reuters Ticker VOLT.NS
Face Value 1
Beta vs Sensex 1.69
Industry Diversified
Stock Scan
Electromecha
nl Projects,
40%Engeering
products,
52%
Cooling
products, 8%
VoltasvsSensex
74.40
94.40
114.40
134.40
154.40
174.40
194.40
29-Apr-2013
29-May-2013
29-Jun-2013
29-Jul-2013
29-Aug-2013
29-Sep-2013
29-Oct-2013
29-Nov-2013
29-Dec-2013
29-Jan-2014
28-Feb-2014
31-Mar-2014
CLOSE(Voltas Ltd) CLOSE(SENSEX)

- 34 -
HITACHI HOME & LIFE SOLUTION INDIA LIMITED
Hitachi home and life solution India is a subsidy of Hitachi Home
appliance Inc, Japan. Hitachi India has a primary focus on B2B business.
It is the market leader in telecom AC segment. In the refrigerator segment
it is focusing on models with Inverter compressor. Hitachi India is
constantly strengthening the after sales network having 35 exclusive
service centers in 26 towns apart from 600 other service points including
multi brand stores and service dealers. With this network it covers 317
towns across the country.
BUSINEES SEGMENT
Hitachi India operates in four segments:
1. Refrigerators.
2. Air Conditioners.
3. Spares.
4. After Sale Service
SEGMENT WISE R EVENUE BREAK U
SE GMENT WISE REVENUE BR
Hitachi vs Sensex
Source: ACE Equity
Air
Conditioners
, 81%
Refrigerators
, 6%
Spares, 5%
Service, 8%
75.12
85.12
95.12
105.12
115.12
125.12
135.12
29-Apr-2013
29-May-2013
29-Jun-2013
29-Jul-2013
29-Aug-2013
29-Sep-2013
29-Oct-2013
29-Nov-2013
29-Dec-2013
29-Jan-2014
28-Feb-2014
31-Mar-2014
CLOSE(Hitachi Home & LifeSolutions
CLOSE(SENSEX)
Current market price 165
52 Week high 183
52 week low 99
Market cap (Cr) 295.95
Script Id Hitachi
NSE Code HITACHIHOM
BSE Code 523398
Bloomberg Ticker HTHL IN
Reuters Ticker HITA.BO
Face Value 10
Beta vs Sensex 0.74
Industry White Goods
Stock Scan
Hitachi vs Sensex
Market Data(INR)
Promot
ers,
74.45%
Public,
15.25%
Corpor
ates,
9.31%
Foreign
Institut
ion,
0.99%

- 35 -
DETAILED PEER ANALYSIS
Average collection Period
The Average collection period of Whirlpool is unmatched in the industry
PAT growth
Whirlpool registered a very minimal increase on the PAT margins because summer accounts to
40% of the total sale of Whirlpool and due to slow onset of summer in most parts of India the
summer sale of whirlpool was hit badly and GDP slipped down to 5% adding on to reduction in
sales. Hitachi showed a dramatic PAT growth % wise by actual money wise it increased from 3
Crore to15.3 crore mainly due increase in refrigerator sale by 24% and its focus towards cost
reduction lead to increase in operating profit. While blues star showed an increased growth in
PAT because of Electro mechanical project turned around and showed a profit of 72 crores from
a loss of 85 crore. Thus to sum up PAT margins of Whirlpool’s competitors increased mainly
because of their presence in other sectors. With increase in the overall growth in India Whirlpool
is expected to show better growth.
Source: Annual report, Management discussion

- 36 -
Sales per employee
The average sales per employee at Whirlpool are highest among its peers which
Shows its focus towards hiring and retaining skilled employees. In order to derive
the best from the employees Whirlpool has taken up the following measure:
Improving Managerial Effectiveness, a key management competency, continued to receive
extraordinary focus from the HR team at Whirlpool. Specific feedback on one's managerial
ability was gathered through a managerial skill survey, followed by a skill building workshop
where Managers were trained to become better and more effective supervisors. The Critical
Thinking and Communication Skills Workshop and Project Management Course were
continued to enhance execution capability. Specific focus was applied on improving "Art of
People Assessment Interviewing Capability”. The initiatives outlined above resulted in an
increase in Employee Engagement Score to 83%, placing Whirlpool of India Limited, amongst
the highest in the Whirlpool world. This created more growth oppurchnity which resulted in
80% more role changes than previous year.

- 37 -
Operating Profit Margin
Whirlpool’s operating margins are best in the industry because of its focus in cost cutting.
According to Shantanu Das Gupta Vice-President (Corporate Affairs & Strategy Asia
South) the company has become more judicious in hiring non- essential workforce in all
divisions other than the sales and marketing team. Apart from this raw materials account
to 65% of the total Sales. Also the company which imports 28% of total raw materials
consumed has increased domestic sourcing to save itself from rupee depreciation and
increasing cost
PAT Margins
.

- 38 -
Whirlpools PAT margins are best among the peers because its top line is best among the
peers and adding on to it the company is debt free which is major advantage it has which
majorly influencing the PAT on the other hand the company paid short term interest of 3
crore which is bearable for Whirlpool.
Export
Whirlpool achieved a commendable export business because of neighbouring SAARC countries
performing well accounting to 50 % of the total export. Whirlpool entered Thailand & Dubai
with the launch of Neo I chill refrigerator. While in Nepal & Bangladesh Whirlpool has opened
exclusive brand retail outlets to expand its retail coverage. In future to expand its overseas
business Whirlpool has plans to penetrate into Australia & Sri lanka also.
EPS

- 39 -
Debt/ Equity ratio
Among the listed players in White goods Whirlpool is the only debt free company because it does
not wants to bear any king of fixed financial charges as the sector is very price sensitive and
presence of fixed interest would hamper its PAT & in case of any additional cash requirement it
gets support from its parent Whirlpool Corporation. On the other hand Videocon has a high debt
whose interest cost it can’t bear has plans to sell 10% of its stake in Mozambique Gas field to
raise 16300 crore to retire its debenture and cut down the interest cost which it can manage .
Source: http://www.business-standard.com/article/companies/videocon-to-cut-debt-with-10-stake-sale-
in-mozambique-ga

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