Whirlpool has posted a 14% growth in sales for the first quarter ended 31st March 2001 to Rs 2,257 m. Against the negative growth witnessed by the durable industry, the company has reported a healthy growth in sales.
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However, the slow down in sales has taken its toll on realisations of the company, which is reflected in the margins. Operating margins, for the first time in the last three quarters, have dropped sharply by 230 basis points to 7.6% (Whirlpool had reported a sharp growth in margins from 5.7% in FY00 to 6.8% in FY01).
Net profits have hardly grown despite a 14% growth in sales primarily on account of lower other income and pro-rata charge of the voluntary retirement scheme payments of Rs 6.3 m. Infact, if we were to remove the other income component, the company has actually reported a loss of Rs 46 m. However, lower interest costs and depreciation have prevented the net profits from a huge decline. Interest costs have been on the decline for the last four quarters, as the company has been repaying its debt through the money raised from the rights issue.
The scrip is currently trading at Rs 19, at a P/E multiple of 11.7x the FY01 earnings.
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