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Whirlpool India's profit soars on better fiscal management

Last Updated 04 June 2009, 16:52 IST

When the going gets tough one has to re-engineer internally to remain profitable. Whirlpool India, promoted by US-headquartered $19 billion Whirlpool Corporation, has done exactly that in a year when consumer durable industry was badly hit by recession.

Whirlpool India reported a 200 per cent jump in its profit before tax in 2008-09 at
Rs 86.19 crore as against Rs 28.80 crore in the previous year. The company’s total income at Rs 1,719.23 crore, however, was only 10 per cent higher than the earlier year.  Focused mainly on refrigerators, washing machines and air conditioners, Whirlpool managed to improve its margins substantially by tightening its working capital need and improving receivables.  Talking to Deccan Herald here, Whirlpool India Vice President —Corporate Affairs & Strategy Shantanu Das Gupta said: “We possibly achieved the best profit margins in the industry although our products are priced 3 to 4 per cent more than others.”

To squeeze out surplus, Whirlpool lowered its receivables from dealers by giving them cash discount. On the other hand, it managed to get best deals from its suppliers in payment schedule.  The combined effect was that in 2008-09 Whirlpool had a negative working capital of Rs 9 crore, though its volume of business in the year was Rs 1,719 crore. This in turn led to a saving of Rs 5 crore in interest cost. Das Gupta pointed out that by virtue of its strong brand name, the company maintained 22 per cent market share in the country’s refrigerator market and 15 per cent market share in washing machine.  “The aim now is to raise our share in the wash market to the same level of refrigerators. To achieve this we have launched 14 models of washing machines since the beginning of 2009,” he said. 

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(Published 04 June 2009, 16:52 IST)

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