Midcap Microscope: Promoter stake sale weighs on Whirlpool India but how much is in the price?

Whirlpool of India Ltd. has had a rollercoaster ride in the recent past and one announcement led to the stock halving from its recent highs.

The question though post this recent correction is how much of the bad news is already in the price?

Firstly, what led to this sharp fall? The promoter entity. Whirlpool Corporation, the parent, announced plans to reduce its stake in the

Indian unit from the current 51% to just around 20% by mid or late-2025. That is a significant sell-down.

This is not the first time they plan on doing something like this either. Last year, they offloaded 24% stake via block deals worth $468 million. Whirlpool Corporation CEO Marc Bitzer cited elevated valuations of the India entity as a key factor behind the move.

Beyond the promoter stake overhang, there’s another key risk for Whirlpool of India — the royalty and brand licensing fee, currently at 1.4%. Any modifications here could impact earnings, and the market is waiting for clarity on that front.

Let’s look at the business itself. Whirlpool India’s revenue comes mainly from refrigerators and washing machines. And they’ve been expanding in the kitchen appliances space too, increasing their stake in Elica, which now contributes to about 7% of total revenue.

Under the leadership of Narasimhan Eswar, the company has see a significant turnaround. Market share in refrigerators and washing machines has improved, cost-cutting measures have boosted gross margins, and working capital management has strengthened. Whirlpool India's cash is worth nearly 25% of its market cap—something investors always like to see.

On the valuations front the stock trades at under 30 times earnings which is significantly lower than its historical average of 45 times. The parent entity though, still trades in single-digit multiples. So, is this an opportunity or a value trap?

Going forward, there are a few critical factors to watch:

It’s been a whirly path for Whirlpool India—plenty of twists and turns. But with valuations now lower, is the worst priced in?

Globally, Whirlpool has been exiting various businesses while still holding minority stakes in Whirlpool China and its EMEA joint venture. So, this move isn’t entirely surprising. But time will tell what does it mean for the company’s future in India.

Shares of Whirlpool of India are trading 1.5% lower at ₹973.25. The stock has gained only 1.5% so far in the last one month.