Whirlpool of India Crashes Over 60% – Here’s What You Need to Know
Whirlpool of India, one of the leading players in the home appliance industry, has witnessed a sharp decline in its stock price, eroding investor wealth by over ₹19,464 crores from its peak valuation of ₹31,074 crores. The stock has tumbled over 60% from its 52-week high, leaving investors concerned about the company’s future prospects.
So, what led to this drastic fall? Let’s dive deep into the key reasons behind Whirlpool of India’s stock crash.
Stock Price Performance
The stock of Whirlpool of India has been in freefall over the last six months.
- Market Capitalization: ₹11,610 crores
- 52-Week High: ₹2,449
- Current Price: ₹915
- Drop from 52-Week High: 62.63%
This sharp decline has largely been attributed to concerns surrounding stake reduction by its promoter, increasing competition, and declining profitability.
Key Reasons Behind Whirlpool of India’s Stock Crash
1. Promoter Stake Reduction
One of the biggest triggers for the stock’s decline is the reduction in promoter holding. Whirlpool’s parent company, Whirlpool Corporation, decided to lower its stake significantly, creating uncertainty among investors.
- Promoter Holding in Q3 FY24: 75%
- Promoter Holding in Q3 FY25: 51%
- Planned Reduction: Further to 20% by late 2025
The initial stake sale led to heavy selling pressure, and the announcement of further dilution added to investor panic, leading to a sustained downtrend in the stock.
2. Increased Competition & Shrinking Margins
Whirlpool is facing intense competition from global and domestic brands like LG, Samsung, and IFB, which are aggressively expanding their market share in India.
- Competitors are offering more affordable and technologically advanced products.
- This has led to price wars, impacting Whirlpool’s profit margins.
- Despite revenue growth, the company’s net profit margins remain under pressure.
3. Financial Performance – Mixed Signals
Despite a YoY revenue increase, Whirlpool’s quarterly performance has not been consistent, adding to investor concerns.
Revenue & Profit Trends
| Metric | Q3 FY24 | Q3 FY25 | QoQ Change |
|---|---|---|---|
| Revenue (₹ Crore) | 1,536 | 1,705 | -0.46% |
| Net Profit (₹ Crore) | 30 | 45 | -20% |
While Whirlpool posted a 50% YoY growth in net profit, its QoQ decline of 20% raised red flags about sustainability.
Financial Ratios & Key Metrics
| Metric | Value | Industry Avg. |
|---|---|---|
| Stock P/E | 35.6 | 59.7 |
| Book Value (₹) | 298 | – |
| Dividend Yield | 0.54% | – |
| ROCE | 9.07% | – |
| ROE | 6.36% | – |
| Debt-to-Equity | 0.01 | – |
| Intrinsic Value (₹) | 334 | – |
| RSI | 18.2 | – |
| EPS (₹) | 25.0 | – |
| Graham Number (₹) | 410 | – |
| Free Cash Flow (₹ Cr.) | 544 | – |
The Relative Strength Index (RSI) of 18.2 indicates that the stock is in oversold territory, meaning it may be due for a technical bounce. However, long-term fundamentals remain a concern.
Should Investors Worry?
The stake dilution and shrinking market share are the key reasons behind Whirlpool’s downfall. While revenue growth is still visible, declining profit margins and increasing competition are major risks.
Positives:
✔ Debt-free company (Debt-to-equity: 0.01)
✔ Strong brand presence
✔ Innovation-driven product lineup
Concerns:
❌ Promoter stake sale uncertainty
❌ Tough competition from rivals
❌ Shrinking profit margins despite revenue growth
Final Thoughts
Whirlpool of India’s massive 60% crash has sent shockwaves through the market. While the company has strong fundamentals, the promoter’s decision to sell a large stake has weakened investor confidence.
Investors should closely watch:
- Any new strategic initiatives from the management
- Whether profit margins improve in the coming quarters
- The pace of stake reduction by the promoter
For now, the stock remains under bearish pressure, and only a strong earnings recovery or clarity on promoter stake reduction can turn things around.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.