Whirlpool of India reported March quarter results on Wednesday that missed street expectations. The company's profitability was impacted due to muted growth in the entry-level market, particularly in refrigerators and air conditioners.

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The entry level market underperformance led to the company's revenue declining by 2 percent year-on-year to Rs 1,673 crore. The number was below street expectations of Rs 1,770 crore.

Net profit for the quarter fell by 25 percent from last year to Rs 64 crore from Rs 85 crore. Lower sales due to subdued market conditions and calibrated price correction actions impacted the company's profitability.

Operating profit or EBITDA fell by 28 percent to Rs 106 crore, lower than the street estimate of Rs 151 crore. EBITDA margin also fell by 6.3 percent from 8.6 percent last year

Earnings before interest tax depreciation and amortisation (EBITDA) remained down at Rs 106 crore in the last quarter against Rs 148 crore a year ago and the street estimate of Rs 151 crore for the quarter.

EBITDA margins stood at 6.3 percent against the poll estimate of 8.5 percent and 8.6 percent during the year-ago quarter.

The management said that the impact on profitability was partly offset by reduction in commodity costs.

Brokerage firm Nirmal Bang, while retaining its Accumulate rating on the stock, cut its price target to Rs 1,375 from Rs 1,435 earlier.

The cut in price target largely reflects demand pick-up in the entry segment and margin improvement going forward, as inflation pressures abate.

Nirmal Bang expects the company to report EBITDA margin of 6.8 percent and 8.1 percent in financial year 2024 and 2025 respectively, mainly due to lower raw material prices, growing economies of scale, increased focus on cost optimization, disciplined capital allocation and premiumisation of the

product portfolio.

Nuvama has downrgaded the stock to reduce with a price target of Rs 1,200 as it expects the company to enter an extended earnings downgrade cycle with no green shoots of recovery. It also sees weak consumer discretionary demand with refrigerators feeling more pain amidst intense competition.

Kotak Institutional Equities also has a sell rating on the stock with a price target of Rs 1,220. The brokerage sees further risk of earnings downgrade in the coming quarters. That, along with weak demand and intense competition keeps the situation challenging.

Shares of Whirlpool of India fell as much as 4 percent in early trading before recovering from the lows. The stock is currently trading 0.6 percent higher at Rs 1,356.65, but is still down 10 percent year-to-date.

(Edited by : Rukmani Krishna)