Whirlpool India Share Price Jumps 19% on Bosch's Bid for Whirlpool US

On June 27, Whirlpool India's shares soared by over 19% following reports that the German engineering conglomerate Robert Bosch is contemplating a bid for the American appliances manufacturer.

After this development, Whirlpool of India share price surged by 19.22%, reaching a 52-week high of Rs 2,190.05 on the BSE. As of March 31, Whirlpool Mauritius owned a 51% stake in Whirlpool of India.

The household appliances company's stock was trading at its highest point since November 2021. Throughout June, the stock has surged by 47%. Over the past four months, it has skyrocketed by 77% and has rebounded 85% from its 52-week low of ₹1,186.85, reached on February 27, 2024.

According to a news agency, Bosch has been consulting with potential advisers regarding a possible bid for Whirlpool, which currently has a market capitalization of approximately $4.8 billion, as reported by individuals familiar with the situation. 

According to a Reuters report on June 26, Bosch's potential move to bid for Whirlpool would enhance its position in the household appliances market amidst intensifying competition with Asian rivals. The German company has been exploring this possibility, with Whirlpool having a market capitalization of approximately $4.8 billion.

In recent years, Whirlpool has been undergoing significant restructuring. This process included merging its European operations into a new entity controlled by Turkish competitor Arcelik and divesting its businesses in the Middle East and Africa.

Earlier this year, Whirlpool sold a 24% stake in its Indian subsidiary for $468 million through its Mauritius subsidiary, reducing its ownership from 75% to 51%, as reported by Reuters in February. As of March 31, 2024, Whirlpool Mauritius Ltd held a 51% stake in Whirlpool of India. The stake was acquired by SBI Mutual Fund, Societe Generale, Nippon India Mutual Fund, and three others at ₹1,277 per share, according to bulk deal data from the BSE.

On June 12, Whirlpool of India, a subsidiary of Whirlpool Corporation and a well-known brand in the Indian washing machine market, announced a new marketing partnership with Surf Excel, a leading brand of Hindustan Unilever (HUL). This alliance aims to transform and elevate the laundry experience for Indian consumers. Whirlpool and Surf Excel are dedicated to improving consumer satisfaction through joint marketing initiatives, addressing evolving consumer needs, as stated by the company in an exchange filing.

In the second half of the fiscal year 2023-24 (H2FY24), the company experienced a 9.9% increase in consolidated revenue, attributed to enhanced execution and the impact of product upgrades and innovations. This positive development contrasts with a 3.6% revenue decline in the first half of the same fiscal year (H1FY24).

Whirlpool of India stated that profits in the first half were affected by pricing adjustments made to enhance competitiveness and the impact of regulatory cost charges. However, these factors were offset by volume growth, significant cost productivity, and mix improvement actions, resulting in a 51% growth in consolidated profit before tax (excluding exceptional items) in H2FY24. Additionally, the Elica business continued to show healthy revenue growth with strong profit margins, according to the company.

Brokerage firm Nuvama anticipates that Whirlpool will achieve an 11% compound annual growth rate (CAGR) in revenue and a 25% CAGR in operating profits over the fiscal years 2024 to 2027.