Consolidated net profit fell to Rs 250.8 million despite 13.7 per cent revenue growth, as expenditure on materials and components increased sharply
Whirlpool of India’s profitability came under pressure in the September quarter as a sharp increase in material expenses outweighed revenue growth, with consolidated net profit declining 39 per cent year-on-year to Rs 250.8 million.
The company, which manufactures refrigerators, washing machines and other home appliances, had recorded a profit of Rs 413.3 million in the corresponding quarter of the previous financial year.
Revenue, however, moved in the opposite direction, increasing 13.7 per cent year-on-year to Rs 18.7 billion during the July-September period. The growth in sales did little to offset the rise in operating expenses, which climbed 15 per cent to Rs 18.97 billion.
The biggest increase came from materials and components consumed, expenditure on which surged 33 per cent from the year-ago period. The escalation reflects the continuing pressure on appliance manufacturers from higher commodity prices, particularly those linked to crude oil.
Whirlpool India has also been dealing with currency depreciation, adding to the cost of imported inputs. Prices of materials such as methylene diphenyl diisocyanate (MDI), polyol and expanded polystyrene (EPS), used in packaging, have risen amid geopolitical disruptions affecting supplies from the Middle East.
The company has relied on price revisions and internal cost-control initiatives to absorb part of the increase. It has also raised product prices by approximately 5 per cent with effect from 1 November, following earlier adjustments.
Seasonal Slowdown Weighs On Quarterly Sales
Apart from input-cost inflation, the business faces a seasonal moderation in demand during the July-September period. Air conditioners and refrigerators account for nearly two-thirds of Whirlpool India’s revenue, making the company’s performance particularly sensitive to the end of the summer buying season.
The management had indicated the possibility of a difficult second quarter during its first-quarter earnings call, describing the period as a “tough quarter financially”.
The sequential revenue movement reflected this seasonal trend. Turnover declined 31.3 per cent from Rs 27.27 billion in the April-June quarter to Rs 18.7 billion in the September quarter, despite remaining higher than the corresponding period last year.
The latest results underline the challenge facing the appliance maker: maintaining profitability amid elevated input costs while navigating demand fluctuations across its key product categories.
