Whirlpool of India Ltd

NSE:WHIRLPOOL

Q3-2025 Earnings Call

[Operator]

Ladies and gentlemen, good day, and welcome to Earnings Conference Call of Whirlpool of India Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Ms. Roopali Singh, Company Secretary. Thank you, and over to you, ma'am.

[Roopali Singh, executive]

Thank you, Neerav. Good evening, ladies and gentlemen. We welcome you to Whirlpool India's Quarter 3 Earnings Conference Call. I will start by introducing Whirlpool India's management team. I have with me Mr. Narasimhan Eswar, Managing Director; and Mr. Aditya Jain, Chief Financial Officer. As communicated earlier, we also have with us Mr. James Peters, Executive Vice President and Chief Financial and Administrative Officer of Whirlpool Corporation. He joins us today to respond to questions on the anticipated selldown.

A presentation on the business and the financial results of Whirlpool India is available on the website of the company as well as the stock exchange. Before we move forward, I would like to remind you of the cautionary statements that forms part of the presentation. During this call, the management may make certain forward-looking statements. These forward-looking statements are based on certain expectations, assumptions and other factors, which may affect the business results. Attention is also drawn to the cautionary statement made by Whirlpool Corporation in regard to the anticipated spindown, which is captured in the presentation, please read the cautionary statements carefully, and the content of this call should be interpreted accordingly.

With that, I would now like to hand it over to Mr. Eswar.

[Narasimhan Eswar, executive]

Thank you. Thank you, Roopali. Good evening, ladies and gentlemen. This is Narasimhan Eswar, the Managing Director for Whirlpool of India Limited. And I have with me Mr. Aditya Jain, the CFO of Whirlpool of India. I would like to start by looking -- presenting to you the business overview and walking you through the strategic imperatives and the progress we've made against that. Following which, I'll hand it over to Mr. Aditya Jain to talk about the financial performance of the company. So I'll just start with the business overview.

What I wanted to say was that I will be talking about the period between April to December as the quarterly results are with you for October, December, and I'm sure you've had the opportunity to study it. We will also take any questions on it later. But I really want to talk about momentum that we have created through the end of last year and into this year and how we're sustaining this momentum through April, December. What do I mean by momentum? Revenue growth in April to December for Whirlpool is 17% growth versus last year. We've not only grown the revenue, we've had a pretty good success in the cost takeout program, what we call the productivity for growth program. This has led to a gross margin improvement of 220 basis points versus last year.

We're quite proud that the PBT growth of the company is about 100% versus last year. And this PBT improvement is about 210 basis points a year ago. That means the lines in between gross margin and PBT have also been managed quite strongly. We are very happy with the fact that the share gain has been very good. The market share gains that we had on volume market share has been on triple-digit basis points over all 3 quarters versus last year in both refrigerators and washers, which make up 90% of the business that we play in. Most of these have stemmed from strong positive results that we've got from our ROI-based investments that we've done, which we'll talk to you about before.

I'm also pleased to report that working capital, which is an important parameter of how the company is working, we've also seen some substantial progress versus a 5% of sales working capital in September 2023. We have published earlier minus 3% in September 2024. And the company continues to generate healthy cash as we go along. Next slide, please.

Let's start with the revenue and the profits for a second. We'd like to say that there's a clear turnaround of the business in the '24-'25 fiscal year with strong profit growth the company in it.

Let me draw your attention to the left side of the chart, where we show the stand-alone revenue from operations growth. In 2021, '21, '22 and '22, '23, we were often between minus 1.6% and plus 3.6%. So between a slight decline to low-single digits. In the first half of '23-'24, as you know, we still had a difficult time. It was minus 4.3%, but things were banning to turn around. In the second half, which was a different story, we grew the business nearly 10% versus the previous year. And I'm glad to report that in these 9 months, we've grown by 17.2%. That's about 15 months of continuous revenue growth, which makes us feel that we have done the job in terms of turning around the revenue situation.

But is it just revenue. If you go to the right side of the screen, you have the stand-alone profit before tax absolute growth percent versus last year, from between a minus 20% to minus 30% up to the first half of '23-'24. In the second half of '23-'24, we delivered a growth of 58% from profit. And in the 9 months of '24, '25, we've delivered 101% growth versus a year ago. So both revenue and profit have turned around, and that's why we said it's a turnaround. Now how have we done on market shares.

Next slide, please. This is Slide #9. I'm referring to. This line at the bottom is basically the volume market share year-on-year combined for refrigerators and washers from multi-brand outlets, the off-line. As you can see, the market has been growing somewhere between mid-single digits, just once went to double digits, low double digits and then came back to about mid-single digits or flat. That's been the kind of profile of the [ ref ] and washer market for the last let's say, 2 years in the 2 calendar years. Our Whirlpool volume market share, which was down triple digits basis points from Jan to March '23, we were able to start moving in the right direction in April to September '23. In those 6 months, while the market was flattish, we had already taken in the first quarter of -- when I say the first quarter, I mean, Jan to March '23 of the calendar year.

We have taken some price corrections, and we introduced our new Direct-Cool ranges. We then stepped up our execution and we launched our Frost Free range upgrades with great claims in April to September '23.

As you can see, the shares started moving in the right direction. There was still negative double-digit basis points. October '23 to March '24, we started turning around the share significantly. There was a lot of focus on sales execution and capability, service execution and capability. There's a lot of focus on the front line and driving our business, driving our consumption as well as driving premiumness through the mix. From April '24 to December '24, every quarter, we've grown triple digits versus a year ago in terms of market share. We have done that through a combination of many things, 2 or 3 things per quarter.

We brought in new products, whether it is a glass door, or whether it is a dynamic citizen dispenser in semi-automatic washing machines. We brought in much stronger execution focus, increasing that as we go along. We took some of our great products that we have in washers and launched extended warranty on those offering more value to the consumer. We brought in additional retail executives to drive our consumption did several promotions that were the right promotions at the right time, including at the festival season. And at the end of the calendar -- the end of the calendar year this year, we've also launched our new aircon ranges. All of that is resulting in share growth year-on-year.

Now what is very interesting to see on the next slide is the question that would come then the next question is, is it just 1 or 2 categories that are driving this growth? Or is it happening as broad-based growth across categories.

Let's take a look at this very, very complex chart, which is Chart #10. And I apologize that it's so detailed, but I did want to give a lot of color to you. The first flow is basically the direct cool refrigerators, the second row is no frost refrigerators. The third row is SA, which is semi-automatic washing machines. The fourth is vertical access or top load washing machines and the fifth row is the front load washing machines. These are basically the market shares in bps was a year ago, basis points was a year ago.

Just to take Direct-Cool, for example, we were having a triple-digit market share decline in Jan to March 2023. With the right pricing and with the new ranges, we started to turn that around with much better increased sales execution in April to September '23. And after that tax from October '23 onwards, we've been growing triple digits versus a year ago in the Direct-Cool refrigerator. All of you would know that Direct-Cool is also the strongest part of our portfolio historically. We are very happy that we're able to turn that around and start getting that into growth as a flagship business for our company. If you look at no frost, we had a couple of strong -- a couple of tough quarters in the beginning. It's not just Jan to March '23, but April to September as well, which is declining.

We started correcting that with our new ranges and sales execution focus and several other things. In October to March, we were still declining, starting to move the right way. As you can see in April to June, we went to double-digit basis points growth versus a year ago, July to September the same thing. I'm very happy to report in October to December, we've actually moved to triple digits basis points growth versus a year ago, thereby showing that we are fully capable of driving the premium end of our business as well.

Semi automatic was quite a challenge primarily because there were a lot of competition, which was advantaged on price -- on the price that they were working on in the market. It did take us longer to turn that around. But as you can see with the right set of actions, including warranty and right pricing actions, we've been able to start growing the business from July to September and with a strong double-digit growth in October to December.

On the top loading machines, similar to the DC, the Direct-Cool refrigerators, we started growing triple digits from a declining business on market share. We started growing triple digits, and we've continued to do that from October '23 right through December '24. And lastly, on front loading, obviously, there is growth versus a year ago, pretty good growth. And that's because the base for our front-loading washing machine is quite small, and we see significant opportunities on that going forward.

So net-net, all our categories have been in strong growth, not just for the last quarter, but for the last 2, 3 quarters. This is the same, if you look across regions as well to different extents, but all our regions whether it's north, south, east or west is growing as well.

For me, what this actually tells us and this is what makes us very happy about the results that we have is it's not just about the numbers, but the quality of the number that is growing in a direction and for me, that doesn't mean that it's just about 1 or 2 categories. It's about consistent growth across categories, consistent growth across geographies that augurs well for 2 things. One is the Whirlpool brand, name. And I think Whirlpool is back. And the second thing is our organization. And that absolutely, our organization seems to be performing at the level that we'd love to see it perform in the future as well. Next slide, please.

Let's move on now to gross margin. Slide #11. In 2021, '21, '22 and 2022, '23, we were declining gross margin versus the previous year by a reasonably substantial amount. The correction started in '23, '24 in the first half of the year with our cost productivity program is fully in place. And you can now see that the last 15 months, we've grown our margin versus last year by more than 220 basis points, which is leading us to the profit growth. Next slide, please.

We're also very happy with the work we've been able to do on inventory on payables and receivables because working capital is a very good indication of how operationally strong we are. You can see in March and September '22, we were operating at a positive net working capital as a percentage of net revenue. These are all published numbers, March '23 and September '23 as well, very similar. But in March '24 and September '24, you can see the substantially lower net working capital that we've been able to bring in, which also helps us from a cash point of view and also from a general operational point of view. It also kind of hints to you. And I can tell you that inventory is also an important part of this.

It also hints to you at the work we've been able to do on demand forecasting and being able to come up with much better operational efficiency.

Next slide, please. So that's on the business that I wanted to give you a perspective. I'll now move on to the strategic imperatives. Slide #14, please. Our strategic imperatives are inspire generations with our brands. win with product leadership, excellence in execution, building a competitive and resilient supply chain and growing our consumer direct business. Let's take a look at it one by one. Starting with inspiring with our brands. You're free to click on the link that is embedded in your presentations.

This is our frost-free television campaign that we have in select states. I would really request you to take a look at this campaign. We are very happy with it. We are very proud of the campaign, and we're also happy with the initial results that we're getting out of it.

Next slide, please. But it's not just refrigerators that we'll be able to do some good stuff on the brand's work. It's also on washing machines. As usual, we worked together with one of the great consumer companies of India, Unilever to come up with a penetration-driving campaign, which drives penetration of washing machines and liquid detergents going forward and the joint marketing associated with it, which includes the TV campaign, sampling and on-pack endorsement and this has started as well.

Again, the link is there in the presentation for you to have a look at. And this TV commercial communication has been on air, since the middle of last year. But that's not all we've done on inspiring with brands. We move to the next slide, please.

On Slide #17, we're so confident of the products that they have that on semiautomatic working machines. We decided to give a 4-year comprehensive warranty on semi-automatic washing machine, which gives us a good advantage of as many brands in the market. We're able to do this because we strongly believe in the product quality that we deliver. On the success of the semi-automatic washing machine warranty, we were able to extend this to the front load fully automatic washers, offering a 5-year comprehensive warranty on these washers. All these inspired trust with our brands and make the Whirlpool name even stronger in the market. Next slide, please.

Moving on to product leadership. Slide #18. We've launched new Direct-Cool Glassdoor range, as you can see there, is our beautiful design, they look absolutely beautiful in the market, appreciated by consumers, appreciated by the trade. We are very proud of the fact that these ranges are fully the glass door for this, what happened after the new regulatory regime was introduced. And all these glass doors are completely made in India. And this is part of our contribution to the whole Atmanirbhar Bharat, make in India, develop in India and do in India, and we are very proud of the fact that these glass stores have been developed in India and got into the market by us and we look forward to these glass door ranges giving us a lot of good solid ground in 2025. Next slide, please.

If you look at Slide #19, the other example of something that we have brought in, which is a real innovation is the introduction of the dynamics detergent dispenser in the semi-automatic washing machines. Typically, people would look at semiautomatic washing machines and say, not much innovation can happen in this segment. It's not very high technology compared to front load or fully automatic top load washing machines. Well, we've brought in some good technology into this. This dynamic technology that we has brought has hydrodynamic fins in the washing machine that mix the powder detergent that is used with water before it goes on to the clothes. So efficiently that no detergent coagulation happens and therefore, you end up with 0 detergent patches, not 0.1, but 0 detergent patches. And that's something we're very, very proud of. Watch out for more on this space. The next slide, please.

We move on to the third parameter of excellence in execution and creating a consumer-centric service organization. Our aim, as I said before, has been always to win every day and every store with every consumer. We've invested significant amounts in the front-end capability and capacity, be it service or be it sales. We have put in a lot of work to ensure great execution, driving our premiumization goals, including ensuring much stronger visibility of our premium lines and our new ranges. We've made sure that we're dynamically always looking at the right pricing strategy, especially on our premium lines, but when necessary, even in our popular mass lines. And we continue to leverage our great customer relationships built by decades of giants over the last 3 to 4 decades.

If I take a retention to the right side of the screen, we are very happy that the Net Promoter Score on service continues to see an improvement. You can see in that graph Net Promoter Score starting from middle of 2021 to literally today and you can see that graph is going in one direction. At some point in time, I guess, this is not going to go up anymore because this looks pretty close to 100%, not too far away. But we're quite happy about that, jokes apart with the way we've been able to inspire trust in our consumers, in our trade colleagues with our service partners and so on and so forth with this. Next slide, please.

And then of course, the productivity for growth program that I mentioned. This has been key to driving improvement in our margins. First, the productivity for growth program is a huge exercise that we do. It's a regular systematic program that covers all lines of the P&L and we've had significant step-up in the material cost productivity actions, but also in several nonmaterial productivity actions, driving overall efficiency in the P&L. We're also delighted to announce that we achieved silver WCM world-class manufacturing standards in our factory in Pune and our other 2 sites are already at Bronze for world-class manufacturing, which are the sites in Faridabad and in Puducherry. Next slide, please.

With that, I would like to hand over to Mr. Aditya Jain for the financial performance.

[Aditya Jain, executive]

Thank you, Mr. Eswar. My name is Aditya Jain, and I'll talk about the financial performance of the company. I'm on Slide 23. On this slide, we'll talk about quarter 3 financials on a stand-alone basis. In this quarter, our revenue grew by 12%. The double-digit growth in revenue was driven by multiple factors. First and the foremost one was a strong market share improvement, which we have witnessed in [ ref ] and washers. Mr. Eswar has already explained the factors which have driven this market share improvement. So I'll not dwell again into it. The second factor is the relatively better industry growth, which we have seen during the festival months of October and November. And the third factor is the segment premiumization that is a continuous focus on driving premium side of the business and ensuring that our revenue grows ahead of the volume growth.

In this quarter, we have delivered an EBITDA of INR 44 crores. That's a growth of 13.5% versus a year ago. In this quarter, we had taken a provision of INR 15 crores on account of additional e-waste expenses. This is to account for the new e-waste credit rates, which have been notified by the new e-waste regulations. And without this additional impact of INR 15 crores, our operational EBITDA grew by 52% versus a year ago.

On PBT, we delivered EBIT of INR 36.5 crores in this quarter. That regents a handsome growth of 65% versus a year ago. The PBT improvement was driven by the strong top line growth, which adds to the DCM. The cost productivity actions across technical projects as well as commercial negotiations, resulting into an improved gross margin of 200-plus basis points, better pricing and improved mix.

I spoke about the additional provisions on account of e-waste. And without the impact of that additional provision of INR 15 crores, our PBT grew by 132% versus years ago in this quarter.

On Slide 24, this slide talks about the consolidated performance for quarter 3. On a consolidated level, again, we saw a top line growth of 11%, which was a double-digit top line growth. Our EBITDA came in at INR 69 crores, which was a growth of 11% versus a year ago. But without the additional impact of e-waste accruals, our EBITDA grew by 35% versus a year ago. And PBT came in at INR 59 crores, which represents a growth of 40% versus a year ago. And without the additional impact of e-waste, our PBT grew by 77% versus a year ago. On Elica, the business continues to do well and deliver a healthy double-digit profit margins.

The next 2 slides are Slide 25 and Slide 26. Those 2 covers the 9 months financial performance on stand-alone and consolidated basis. Mr. Eswar has already explained and spoken about the 9 months results. So I will not repeat this thing, but I will pause on the slides for a couple of minutes for you to have a look at the numbers.

With this, we have also received one question. And the question was about the increase in employee cost over the last 2 quarters. And the answer is that the increase in employee cost is on account of 2 factors. The first one is the investment in retail executives. That is the front-end capacity and capability build, which we have done to augment our uptakes and which has translated to our market share gains.

This is a financial ROI-based decision and we track the productivity of these decisions on a monthly and quarterly basis. And the second reason for the increase in employee cost is the higher bonus approvals on account of the significantly improved financial performance versus last year.

With this, I will hand it over to Mr. Peters.

[James Peters, executive]

Hello. This is Jim Peters, CFO of Whirlpool Corporation. And good evening, everyone. And before we open the call to questions, I just wanted to share a few comments with our investors. We view this anticipated sell-down as a win-win for Whirlpool of India and Whirlpool Corporation. It provides Whirlpool of India with increase flexibility, enabling it to focus on accelerated growth and delivering initiatives to drive long-term sustained growth at the same time, while Whirlpool Corporation maintains its focus on margin expansion.

The proposed sell-down is not expected to have any impact on Whirlpool of India's business continuity as we intend to enter into long-term brand and tech agreements with Whirlpool of India in addition to transition commitments. Furthermore, Whirlpool of India can more independently utilize its well-funded business to make strategic investments that fuel its long-term growth potential in which Whirlpool Corporation has very high confidence.

With that, I'm happy to answer any questions you may have.

[Unknown Executive]

Thank you, Mr. Eswar, Mr. Jain and Mr. Peters. I would now request the moderator to please open up the Q&A session.

[Operator]

[Operator Instructions] The first question is from the line of Naushad Chaudhary from Aditya Birla Sun Life.

[Naushad Chaudhary, analyst]

And I congrats the India team for what we have achieved in the last 1 year. Now with all the efforts, we have reenergized the business. We are growing and gaining market share in India. The productivity improvement is reflecting at the gross margin expansion level, but below that, we have a concern by when do you think the productivity initiative, which you have taken should fall below gross margin as well because there are other 2 line items, your staff costs and other expenses, the inefficiency, if I compare it with the India peers are meaningfully high, especially on the staff cost. So what do you think on this? And how will you improve on these 2 cost lines to get the margin back at EBITDA level?

[Unknown Executive]

Thank you very much for your questions. I mean 1 point I just wanted to highlight is that we've just talked about, where we're investing our monies. We are investing into things that are driving ROI within the year. So if you take a look at the financials, we've improved our gross margin by 220 basis points. At the bottom line level, the PBT has increased by 210 basis points. While some of the costs are increased, that cost is actually reflected directly in the market share gains. The market share gains and the premiumization is being driven by those cost increases. That's what is actually leading to the market share growth. And as we get more and more scale, that should start looking better and better for us.

[Naushad Chaudhary, analyst]

By when and at what scale do you think you would come as part of India other peers or efficiencies on our staff cost?

[Unknown Executive]

That's a little difficult for me to judge. And the reason is because as I look at other reported data of the past that has been reported, I do not see the same necessarily progression in all players on reported numbers. In some cases, the sales growth can be higher. The profit growth is lower. In some cases, the sales growth is not much higher, but the profit growth can be a little higher. So we are following our strategy. We are following our strategy, which is making sure that we are adding value to the top line and making sure that the bottom line is also progressing at the same time. If you take a look at the profit increase for the last year, like I said for the 9 months ended December 31, 2024. We have grown PBT by 100% versus last year.

So I would love to get, if possible, some color on exactly what the concern would be or what the expectation would be or what is in your mind when you say peers because I'm not able to follow the detail behind the question.

[Unknown Analyst]

Typically, for most of the durable companies, if you look at the staff cost versus revenue, it falls between 6.5% to 8%. So lot of our EBITDA margin, I think, goes into it's staff cost. So there is clearcut that we have inefficiency in terms of the overall staff cost load. I think I would urge you to look at how peers are operating on this cost line item that should, I think, help us to understand where are we lacking from an efficiency point of view on -- especially on the staff cost.

[Unknown Executive]

All right. We can certainly take a look at it. I just want to reinforce the numbers for April to December. The revenue growth is 17% and the PBT growth is 100% with the gross margin improvement of 220 basis points versus last year. And like I said, we are using our staff costs in such a way as to drive the top line and the market share. Please do keep in mind that we are so far concentrated on refrigerators and washing machines. This is a market that has grown in single digits on average in these 9 months.

If you take the total number, it will be in single digits. So we've grown 17%, which means we've substantially improved the market share position. I don't want to go too much into the market share, but I'm sure, sir, you have access to the market shares. And you can take a look at what has happened to our positions and market shares in multiple categories, Direct-Cool refrigerators, for example, on top load washing machine. And that has come through very, I would say, efficient deployment of resources. These resources are there for us to continue our scale. This is what -- part of what has basically driven our momentum. And just to give you the reassurance, we track this performance on a -- actually, on a daily basis, we get the reports of how it's doing in terms of offtake in terms of -- if I put in a buck, how much are getting out of it.

We then look at it consolidated on a monthly basis, on a quarterly basis on a yearly basis. So just to reiterate, we take a look at what you're seeing and then maybe for next time we can have a further detailed analysis on this. But our intent is how we are driving our business is that we've got a revenue growth of 17%, with significant market share gains in triple digits continuously over the last 3 quarters. although while delivering a profit growth of 100% versus a year ago. So I would say, however, I'm utilizing how I utilize that so long as we're delivering that profit growth is what we are really focused on. But we can, for the next time, maybe for the next 6 months, take a look at even deeper dive into peer comparisons, et cetera, if there is any point to be example there.

[Unknown Analyst]

[indiscernible]. Congratulations on good set of numbers and congratulations on gaining market share as the third largest shareholder of Whirlpool. The team is very impressed and we would like to congratulate you on what performance we have delivered in the last 6 to 12 months. My question is to the Global CFO.

Now India being a market where we are the largest population of the world, we are the youngest popular of the world and India Whirlpool is a strong brand. You are saying by selling 30%, you retain the flexibility an Indian team will have more flexibility to do what they want. We just want to question your -- I mean by selling 30%, how can you retain the maximum shareholding rights of an Indian entity here's the money, which you will gain from this, you will use the money for your global needs. Your global fund may require money, but then by selling down 30%, where are your commitment to Indian market?

Because if you are committed to Indian population to Indian market to Indian growth, why will you follow global requirement sell 30% more and want to retain a strategic stake?

[Unknown Executive]

Yes. You know what, I appreciate the question. And first off, we believe that Whirlpool Corporation moving from a majority ownership to a meaningful minority best serves Whirlpool of India. As you mentioned in there and that the proposed sell-down does increase the flexibility for Whirlpool of India to continue to adjust to the ever-evolving industry and business there.

At the same time, Whirpool of India will have a long-term brand and licensing technology licensing agreement with Whirlpool that will benefit the business there, and we will remain committed to that. I think the thing that's most important to understand here is that the India stock market is focused on rewarding growth as they should be and specifically within consumer-focused sectors like household appliances.

And given the future, as you highlighted, the future appliance penetration expectations and the potential of this business to grow and expand share. Whirlpool Corporation U.S. shareholders view the appliance business through a U.S. lens as a mature industry, and that's given the high household penetration in other parts of the world. At this time, we really do believe the right path is for Whirlpool of India to focus on growth at Whirlpool Corporation to focus on margin expansion. Again, we believe in the long-term prospects of this business at this time. But also as you talk about what we would do with the proceeds in that.

Listen, this business, as we've talked about that -- and you've heard in the call here, the financial health of this business is very strong. And that's the thing that also as we look at it.

[Unknown Analyst]

Sorry to interrupt you. If I may, what kind of flexibility will Indian team get, which they both have when you retain the 50% and the second thing is your long-term commitment gets diluted when you are selling 30%?

[Unknown Executive]

Yes. So the flexibility that the Indian team has the ability to make decisions on where best to invest and when to invest and what growth initiatives they want to focus on. And again, this will now put the decision making completely in their hands without the oversight of Whirlpool that has to balance the needs of U.S. shareholders and Indian shareholders with Whirlpool Corporation being more focused on margin expansion. As I said, our remaining commitment of the 20% is still very meaningful, but we will remain committed longer term with brand and licensing agreements.

[Unknown Executive]

So just to complete this, we don't think that with 20% commitment to Indian market remains and the flexibility we have seen with many multi-nationals assets listed in India, Indian team if they are given more flexibility, they can deliver and it's a huge market. That's what we wanted to state even move to the second question.

[Operator]

Next question is from the line of Ankur Sharma from HDFC Life Insurance.

[Ankur Sharma, analyst]

So 2 questions. 1 to Eswar. So clearly, a great job on market share gains, and that's quite evident in the way your top line has grown. And I go back to the margin question, so especially at the EBITDA level. The last time when we had a sell down from the parent, we met you and you said high-single-digit, maybe around that 8%, 9% margin at the EBITDA level is something that you probably will kind of be at -- so how much time before we get there, even if I adjust for this provision, your second quarter margins are at about 3.5%. So when do you think we get back to the high single-digit EBITDA margin.

[Unknown Executive]

Thank you for your question, Mr. Sharma. Yes, we had set our long-term goal. This is what we said, long-term goal, and we had said it will be a multiyear goal, very clearly at that point in time as well. We said we would like to progress just to remind you, everyone on the call, we said high-single-digit growth in revenue and long term, margins, which would be in the high-single-digit. I think we could only do things one step at a time. If you can just appreciate, we were in a situation where our revenues were not growing, our revenues were actually flat. Our profits were declining significantly, and our market share was going down significantly amongst several things. As I said, it takes time to turn ship around. I think the ship has clearly turned around now. We should start seeing hopefully consistent revenue growth in line with what we've said now.

There's also a factor that is the market. Obviously, it depends on the market. If the market starts growing fantastically, then they're going to benefit from that. our focus firstly is on driving the market share because that is something completely in our control. The market is in control to the extent of seasonality. We have a fantastic hot season, then it helps us, you know the refrigerator and air conditioner markets a lot. Refrigerators we play in a very significant way, air conditioner so far, not so much. However, we will try to continue to drive our market shares strongly upwards because we've also demonstrated you very clearly, I hope that we have made improvements on every aspect of the line of the P&L.

All costs are being controlled very tightly and any costs that are being incurred, we are making sure there is a very strong ROI, which is why you're seeing the profit growth and the revenue growth happening simultaneously, not one at the expense of the other. So what we are driving for as a strategy is profitable market share growth. That's what we're driving. I do not have a time frame to give you at this point in time as to when we will get to that. But our intent is to progress steadily and strongly towards that goal. I do not have a time frame to give you that. I had said multiyear and that still continues to be the guidance.

[Ankur Sharma, analyst]

Okay. Fair. And just a feedback/question to the parent, the CFO is there on the call on the parent stake sell down because when we sold it down last time around and we brought it down to 51%. I think the general understanding was that the parent would probably keep it there and not sell down further. So obviously, going to '20 was a little bit of a surprise for us. But more importantly, how exactly will that be done? Would that be -- is the parent we're also looking at a strategic sale to a financial investor, given you need to obviously sell almost $0.5 billion of stock here and absorbing that kind of supply is going to be very, very difficult if you said it in the market. So are you also exploring a strategic sale to a financial partner. Is that also on the table? And how do we get confidence that Whirlpool does not completely sell out eventually. I think those are the 2 questions I have.

[Unknown Executive]

Yes. No, I appreciate. And while we have not -- we haven't finalized the details of this, we will continue to assess all options in the sell-down process, ensure that we proceed what we expect to be the best value-creating opportunity for Whirlpool Corporation and Whirlpool of India.

In the last sell-down, we did execute it via a block trade transaction and that approach worked well, and we were pleased with the outcome. But again, we will keep all our options open and finalizing this over the coming months. And then to your question, again, we intend not just through our significant ownership's remaining ownership stake, but also through long-term ongoing brand and technology licensing agreements as well as any transition agreements to support and continue to be invested in Whirlpool in India and the growth of Whirlpool India.

[Ankur Sharma, analyst]

Okay. And sorry, just a follow-up there would be, we should not expect any increase in licensing/royalty arrangement, right, versus what we have as of now given that our stake has come down below 51%. Would that be a reasonable assumption?

[Unknown Executive]

Right now, I can't comment specifically on that would be something more with management.

[Operator]

Next question is from the line of Bhavin Vithlani, SBI Mutual Fund.

[Bhavin Vithlani, analyst]

Yes. So this question is to Jim. You mentioned that the sell-down will give more autonomy to the Indian management. And I want to understand this a bit more because the India management decided to plow back the benefit of gross margins in terms of higher employee expenses, which is in the right interest of the longer term compromising near term for the better long term.

We decided to expand the capacities, when the utilization is 60%, which again, I understand is a good interest of a longer run and a new plant of front-load washing machine. So what is a greater autonomy that the India management gets beyond this why Whirlpool global parent reduces the stake from 51 to 20. I fail to understand. Please help us.

[James Peters, executive]

Yes. As I highlighted before, and again, I can only expand to a certain extent because this is also things that will be executed by the Whirlpool of India management. But as I highlighted, this will allow the Whirlpool of India management team and company to make strategic decisions as quickly as they possibly can to make strategic investments in line with what they believe is in the best interest of the world pool of India's shareholders and the Whirlpool of India business.

We do believe that as they do not have to be as concerned with overall Whirlpool global processes or Whirlpool margin requirements. This will allow them to continue to make investments like you just highlighted and focus on the growth longer term of this business, which we believe is the right approach, but it's different from the approach that Whirlpool Corporation shareholders expect.

[Unknown Analyst]

I'm sorry, could -- maybe just -- again just same question to Eswar, if you can, over the last year or so that European, can you give us instances where you wanted to invest, but you were not because of the global balance sheet or process constraints?

[Narasimhan Eswar, executive]

Yes. Thank you very much Vithlani. To be honest, I can't get into that level of detail. What I can tell you is that there are several things, which may not see very big, which we maybe not be seen very big to many people, but there will be several small things, whether it's HR related things or other areas, where a global cooperation has 7 ways of operation. And you generally, in any multinational end up having to do some of those because it's part of a formula. And so I think what is being alluded to is potentially, and I think that is something that we're going to work out as the next few weeks and months because we are also, as you can imagine, quite new to the information like you.

And therefore, we need to work through, which are the areas in which we can actually be enable to move much better. Certainly, I think -- going forward, my guess is that we will be presenting directly to the India Board and then getting the approval and carrying on. And that is absolutely what we'll continue doing as we have done so far. And I think there are probably many areas in which we can get that kind of advantage. But at this point in time to say this is what it is or that is what is very difficult for me to kind of comment on this.

[Bhavin Vithlani, analyst]

Okay. The second part is when the sell-down from sell-down of the 24% stake was announced in February last year. And as part of the India press release, there was an 8-K filing of the parent and that was this item 8.1, which reads that after the sell-down of the 24% outstanding of the publically listed Whirlpool India, you will retain majority in the India.

And on a similar basis, the conference call, which was hosted. And this is -- I'm just reading from the transcript that 1 part of it is the idea is Whirlpool Corporation will continue to hold majority interest in the company. Now when this assurance was given -- I just want to understand what is the entity of these assurances that you've been given now, will also hold because it's not even a year, where these are part of the publicly announce the transcripts of the 8-K filings. And also why do you want to keep and also then why do you want to keep 20%? Why not then completely exit out to the strategic investor?

[Unknown Executive]

Again, as I said before, as we looked at -- right now, as we look at all options, we do believe this is the best option. If you look at where we are. And again, we make continuous assessments of where we are invested, et cetera. And so I'm not going to go into any of those details. What I would say is looking in terms of a strategic buyer at this time. We do believe that with the technology, the long-term technology and brand licensing agreement that we will provide, which is, again, back to a long-term agreement, which is probably the most important thing to support this that Whirlpool Corporation can do to support this business. With that in place, we believe that a strategic transaction with another player would not make sense at this time because it would restrict the ability to use some of those things and would not be as value-creating as it is for us to provide the brand and the technology over the long term.

[Operator]

Next question is from the line of [indiscernible].

[Unknown Analyst]

So just similar questions I had, which was asked previously. And just reiterating the same thought process, where we don't believe that 20% sort of shareholding would mean that there is skin in the game of the management. And ultimately, this risk execution in India business impacting employee morale and the concern could be that given how competitive landscape it is eventually the risk on market share. So eventually, it does not give investors the comfort that a 20% shareholding and why the current parent would not eventually exit over a period of time. So just wanted to share that message again.

[James Peters, executive]

I have no additional comments other than what I've said.

[Unknown Analyst]

Sure. And second -- just secondly, would suggest since we are now starting to host biannual con call. I would request strongly suggest if we can do a quarterly con call because clearly, communication has been a challenge. So that is a feedback I would like to give.

[Roopali Singh, executive]

Thank you. Your point is duly noted. I think Mr. Peters has responded to a majority of the questions on the anticipated sell-down and there are repeat questions. So with that, we will take one last question from Mr. Peters and then request the participants to please ask questions on the business to the India management, if they have any. Operator, back to you to invite the next participant, please.

[Operator]

Next question is from the line of Prolin Nandu, Edelweiss Public Alternatives.

[Prolin Nandu, analyst]

2 questions. 1 is to Mr. Eswar. So again, this is on margin and while you have elaborated quite a lot in the previous question answer to the previous question. I just wanted to understand qualitatively in terms of heavy lifting of expenses and feet on street.

Is it fair to say that maybe last few quarters, you have done some heavy lifting in terms of cost and putting feet on street. And now every incremental rupee of revenue should ideally come at a very low or lesser incremental cost. Is that a fair understanding? Or do you think you still need to invest in brand at the same pace what you have done in the past few quarters to maintain the market share gain momentum that you have reported so far?

[Narasimhan Eswar, executive]

Thank you for the question. I just want to clarify something, and maybe it's not clear, so I would like to take this opportunity to clarify. If there's an assumption that we've just put people and sales on the street, and that is what is leading to the sales increase in market share, that's not true. So I just want to clarify. The significant cost increase. Now typically, I come from the FMCG background before I joined this company. We used to invest and that was one of the great areas of investment in marketing, okay? And marketing is the art of convincing consumers to go ahead and buy your product and be convinced in that product and become an ambassador for that product, correct?

So everybody is very excited when you look at marketing percentage of sales going up because you know that you're investing in the brand. I want to clarify to everybody on the call, and maybe I should have clarified this earlier. When I'm talking about investing in retail executives, I want to help you understand what is the retail executive too.

These retail executives are on the shop flow. They are our ambassadors for the brand. These are not people, who are selling in volumes into the store. They are people, who speak to customers who are coming to buy these products, stand on the shop floor, convince customers to buy our products and guarantee that the sale happens from the outlet.

That's where we've put in quite a bit of our focus in terms of our operating costs. So that's what I meant, when I said that these costs are giving ROI within the year. It's not a guess or maybe it is driving it. It is a guaranteed it is driving it. So this is nothing for me as a marketer, how do I create demand? There are multiple ways to create demand. One of them is to do exactly what I explained now. So we've not put in 500 people -- salespeople to go and sell into the stores. That's what we have not done. What we have done is increase the number of brand ambassadors at the shop floor, who speak to consumers who explain the benefit of our products to consumers, who tell consumers why our Direct-Cool refrigerators are a fantastic product.

Why our front-load machine with ozone technology is great. Convince the consumers to buy the products with excellent rationale. There is a huge training program that we put behind it. There is a huge monitoring that we do of these people, and I dare say that we have amongst the best retail executive forces in the country.

And that is what we put our focus behind. What might help a lot is the way I look at this is anything that drives demand is marketing. So it might come into a line called staff cost or whatever. But what we're really doing with this is driving demand for our products. And that's why it's a direct impact. It's not the only thing. There are 25 things we have done basically. But one of the things that is driving that cost line up is this investment on brand ambassadors in the store to drive our business.

It is not on more people in the marketing department in the head office or in the HR department or in the finance department or any other department. The focus has been on driving consumer demand. And like I have explained before in different fora, so long as I'm getting a very strong ROI from that this year and year-on-year.

It behooves us to do that for our shareholders because that is sustainable and consistent growth. Now having answered that, as we go forward, we will continue to leverage this in other areas of demand generation because I truly believe that if you drive market share the right way with the right ROI investment mentality, that is the one way in which you can guarantee irrespect to what the market does show revenue growth and show profit growth ahead of revenue growth.

And if you take a look at the data that I've showed you for the last 15 months, that's what we've been consistently doing. So just to kind of reassure everybody on the call because now I understand what exactly concern is. you could look at it as a staff cost or you could look at it as a significant proportion being invested in driving actual demand, which means a person comes into the store, and walks out to the Whirlpool refrigerator.

Now what is better marketing than that? Because the person marketing is to create demand for the consumer, long-lasting demand. And because our products are good, we honestly believe that consumers go and recommend our brand to other people as well. So I hope I've given that clarity, and I think maybe I apologize because I might have clarified that upfront. Sometimes the terms that we use may not be of this to everybody in the industry.

So thank you for pointing that out, but I hope this is very clear that what we are doing is using many different tools and you're releasing this tool. There are so many other different tools that we use, whether it's e-com ROAS, return on advertising sales or whether it's sales fundamental increase or whether it's display share increase in the stores, or whether it's increasing in certain areas and promotion. So we've done all the right things that give return on investment within the year within the quarter. And that is what is driving the business. I hope that makes sense.

[Prolin Nandu, analyst]

That makes sense. That's it from my side.

[Narasimhan Eswar, executive]

Thank you so much for your question that help clarify, I think, from my side to everybody. And I hope even the previous questions, what I was asked now I do understand -- I apologize I do understand the intent behind the question, and I hope I've answered it very clearly. We have been investing in demand generation full stock. That's what we've been doing.

[Roopali Singh, executive]

Before we move to the next question, I would like to invite Mr. Peters for his closing remarks. After that, we would continue the Q&A session with the India management team.

[James Peters, executive]

Thank you, Roopali. And again, thank you, everybody, for inviting me to join this evening. In closing, I just want to reinforce my confidence that now at the right time for Whirlpool of India to operate more independently. Today, we have the right leadership and team in place to deliver on the continued growth plans, which I fully anticipate will create long-term value to its shareholders, including Whirlpool Corporation.

We've made a lot of the right product investments in Whirlpool of India and doing well in the marketplace. Additionally, I just want to reinforce that Whirlpool Corporation and Whirlpool of India will continue to support each other via brand, technology and transition agreements to ensure business continuity.

And in closing, I would say, I don't take this decision lightly having managed Whirlpool of India, since 2022 on behalf of Whirpool Corporation. I know the business potential here, and I know what this team is capable of. And I fully expect Whirlpool of India to accelerate shareholder value creation with greater independence. And again, I just want to close with saying thank you.

[Roopali Singh, executive]

Thank you, Mr. Peters. With that, I would request the operator to please put the next participant for the Q&A session.

[Operator]

Next question is from the line of Rahul from Haitong Securities.

[Rahul Gajare, analyst]

And I think on the India business, I just had one question. Whirlpool is very strong in refrigerator and washers and in other products, you have limited presence. So from here on, when we are talking about more autonomy are there some road map that you have planned in terms of more product introduction? Or would you rather stick to the strongholds of refrigerators and washers and ramp-up business and market share in that category?

[Narasimhan Eswar, executive]

Fantastic question. Mr. Rahul, thank you for that question. My answer is both. So to be very honest with you, as I also met and spoken with many people last year in the last call that we had virtually -- the first job that we really had was to make sure that our business gets back on track and gets back on momentum. I truly believe that if you don't get your base business back on momentum to start pouring into 10 different areas, confuses the organization, and make some massive everything. Right now, I'd say not to be caught sure at all because it's a very tough market, very tough competitors -- competitive situation, a lot of challenges, as always, but I think we've managed to turn the ship around.

We will continue to drive this business. Then I think there is no doubt about what our eventual ambition is. I don't want to state it, but I think you can guess what it is. On the refrigerators and washers, we'd really like to do much better than we are doing even now.

And I think over the next few years, we should be able to do that if we put our right thinking and strategies in place, but at least what we have now works. Going forward, there are also opportunities in other areas like you've asked the question. And I want to make sure in the first 12 to 18 months that we get our base absolutely in shape. I think we're in reasonable shape now. So are there opportunities to be looking at in other areas, definitely. Would I want to name them? Absolutely not, sir, because it's a very competitive world. And I certainly don't want to be discussing what those categories are.

It is certainly of good interest to us. And I think, hopefully, you will start seeing some results in another 6 months.

[Operator]

Next question is from the line of Nattasha Jain, PhillipCapital.

[Nattasha Jain, analyst]

My question is, firstly, on the quarterly numbers. So your presentation and you also cited in your opening remarks that there was a very strong tested demand, which led to volume growth. That's appreciated because the market share clearly shows that. My question is if there was such a strong growth, why is there a gross margin decline on a Q-o-Q basis?

[Narasimhan Eswar, executive]

So thank you for your question. The gross margin decline on Q-on-Q basis is on a kind of seasonality. So -- and October to December has the impact of the festival promotions, Diwali falls under this period and the significant relative to the prior quarter. Sequentially, the promotions are higher in the festival period.

And hence, you see a sequential drop in gross margins. And the trend is similar to the last year. If you look at the same trend in these 2 quarters, last year, you would have seen a decline in margins, but the decline this year is lower, which indicates that year-over-year, we have significantly improved our gross margins. To summarize, like it's basically on account of higher promotions during festival season, which happens in this quarter relative to July to September quarter, and hence, you see a sequential drop of margins, which is a normal trend also reflected last year as well.

[Nattasha Jain, analyst]

My second question is, so during Diwali season, we saw one of your competitors facing a factory's strike because of which products were not soled out. Now that the peer has come back in full force with a lot of progression to get back the market share this in conjunction with the fact that fourth quarter is not a washers quarter and washers is a high-margin business. So in the near term, what kind of challenges are you anticipating from the Street?

[Narasimhan Eswar, executive]

I'll take that question, ma'am. So thank you for the question. To be honest, there's something or the other happening with competition all the time and with us as well, something or the other keeps happening. And I think these are all part of the game. That happens to all of us, it can happen to me this quarter, it can happen to someone else.

I don't think that has any impact on what we do or what we plan to do. To be very honest, we have a very clear set of strategies. We have a very clear set of principles that we operate on. That has led us to a decent set of results across time. We plan to continue doing it in the same spirit. The detail of the execution might vary depending on what we need to do going forward.

But the strategies that we talk about, the imperatives, whether it's focusing on the consumer, it inspiring consumers with our products, inspiring consumers with our marketing, inspiring consumer with us, stories at the point at which the consumer is buying the product to our retail executives that I mentioned that we've increased the staff cost, that will continue. Similarly, our focus on gross margins. And I think Aditya explained it very well in the last question, but I was a newcomer just 2 years ago to this industry.

So I just want to highlight the simple way that I would look at this industry is always look at this industry year-on-year. Quarter-on-quarter, it varies a lot, and I'm not talking about us, I'm talking about every company, right? It's a very seasonal business. Refrigerator sell more in the summer, air conditioner sell more in the summer, washing machines, sell more after the monsoon, basically. So it's very tricky to compare quarter-on-quarter. And what we should always do with refrigerator business is with the -- sorry, with the durables business is look year-on-year because it's a seasonal business.

So we will continue to drive the things that we know will give us greater market share, but profitable market share. And that is our sole focus. All our effort is focused on that. To be honest, we don't get distracted by competition. We take note of what the competition does. We respect competition very much, which is very healthy.

But at the same time, we really are mostly focused on what we need to do. And our whole organization focus has been whatever we say we'll do, are we doing that to the best of our ability. If we are doing that to the best of our ability, that's the best that we can do so long as our strategies are right, but more importantly, our execution is bang on. And that is what Whirlpool of India is focused on for the last couple of years.

[Nattasha Jain, analyst]

Understood, sir. Sir, can I just drop on feedback. So on my channel check downs, what I found was while the product quality has definitely improved in the last one year's time frame we did hear a lot of complaints in terms of the packaging. So apparently, the packaging quality has reduced as the reasons of which the products get damaged in transit. So have you received this feedback from channel? And if so, where are we in terms of addressing that?

[Narasimhan Eswar, executive]

Thank you, ma'am. It's actually a very good insight that you've picked up. Yes, when I was in the market with customers a year ago, some people talked about that. We always benchmark our quality percent basically using standard techniques. We have invested significantly on the packaging quality already. And it was not that it was bad before. It was pretty good before, but now it's going to be much better.

And when I say now, I mean literally now as we speak. So those changes have happened between February of 2024 to December of 2024. Quite a few of them are engineering changes, which takes a lot of investment time and effort, but we're absolutely wanting to be, in our minds, at least, the best on quality in the marketplace. Second best doesn't work for us.

So we are okay. We were okay being at the kind of top parity, but we want to move to be the best, and that's a very astute observation. Yes, I did figure it up from customer visits. And yes, we've acted on it and yes, the new products are in the store. And I can tell you that our numbers are -- which we track extremely closely, are going absolutely in the right direction month after month for the last few months.

[Operator]

Next question is from the line of Nirransh Jain from BNP Paribas.

[Nirransh Jain, analyst]

So firstly, congratulations to the India team on the business turnaround. Sir, firstly, I wanted to check that with the increase in the autonomy for Whirlpool India and the decision-making flexibility that we are talking about after the proposed take sale. How are we planning to utilize the surplus cash that we have on the balance sheet, I mean, which is currently used at around 15% to 16% of the market cap. So do we have any plans to increase the dividends or do buybacks in order to enhance shareholder value?

[Narasimhan Eswar, executive]

Thank you very much for the question, sir. Yes, we are rather proud of our cash generating ability. And I think hopefully, sometime in the near future, we'd also be proud of our full cash deployment ability as well. So what we've been able to do, for example, and I'll just give you a small example is we have, and this has been something that we've shared with [ Sebi ] as well, so it's public knowledge. We are now augmenting significantly certain refrigeration, capacities and products. And we're investing a very handsome amount of money for that. And that is something that will enable us to compete even stronger in the marketplace in the coming months and quarters. That's just one example.

So we had, in fact, a few years ago, [ part ] acquired the Elica brand we continue to increase our stake in that brand as it continues to perform very well, adding beautifully to our profit margins in a nice burgeoning industry as we look in the next, say, 10 to 20 years, we see that particular market segment growing despite kind of current market challenges in terms of growth. But we see that segment growing because the penetration of that segment is very low. So we do see quite a few opportunities.

We will not be able to utilize all of it at one time, but we have very, very clear plans, basically, which are standardized plan. We look at whether it's capacity augmentation is required of certain lines whether it is adding new lines, which are producing completely new products, brilliant new products that will serve the Indian consumer even better or whether we're looking at further investments in different areas of businesses or, for example, we could even look at options of inorganic growth, which in the last 2 years, to be honest, we did not do because I told you we had a ship to turn around, and that's what our focus was on.

But going forward, can we look at other ships. It's always a lovely thought, a tempting thought. We were not in the immediate future because as you can imagine, we have a lot on our plate. We need to keep our business going with strong momentum as we have now. We need to make sure that we are also navigating the change that we have across the next month and keep everything going on that keel. But then going forward, there will be further opportunities for us to look at cash and see how best it can serve Whirlpool of India and its shareholders.

[Nirransh Jain, analyst]

Sure, sir. Sir, secondly, like as Mr. James also mentioned that the Whirlpool Corporation is looking to get into a long-term licensing and take agreement as part of the transition. So just wanted to check what is the probability that the royalty fees can be revised further as in like increase further from these levels. So -- and in case like it gets and -- if shouldn't -- this actually gets lowered considering that the stake has come down from 75% to 20% now. So just wanted to get your thoughts whether we should look at it as a further risk in terms of royalty getting increase from here on?

[Narasimhan Eswar, executive]

Sir, I would not at all be able to comment on this because that is not for me to say. I am, as you know, very well a Whirlpool of India Limited Managing Director. I cannot speak for the Whirlpool Corporation. And I'm so sorry, but I will not be able to really give you any sensible answer to this question. I think the answer was provided by Mr. Peters and what he said is what stands because that's more a Whirlpool of Corporation thought process. And if there is any thought process that then comes, then we will go through the normal usual proper process as far as the Whirlpool of India Limited company concerned, which is -- there's a very good, strong board that we have, which helps us take the right decisions. And of course, if there is any further consultation to be done, the Whirlpool of India Board will advise us do that, and we will do the right process.

So I'm so sorry, but I'm not able to answer the question because I do not genuinely know how to answer this.

[Nirransh Jain, analyst]

Sure, sir. I understood. Lastly, on my part, so I wanted to check on the trade discounting. So generally in FY '24, I think trade discounting had remained similar versus last year. So I wanted to check how has the trading been so far in the 9 months in terms of trade discounting as a percentage of sales?

[Narasimhan Eswar, executive]

We've kept our trade discounting percentage roughly at the same levels, that numbers will not significantly change, the endeavor is to keep the trade spends more or less flat. We've been investing a lot of money as Mr. Eswar has explained in terms of demand generation. That's where most of the investments have gone, but trade spends have largely remained the same.

[Operator]

Next question is from the line of Umang Mehta from Kotak Securities.

[Umang Mehta, analyst]

So I just -- maybe some -- if you can share something factual as in your terms, current terms or agreement on royalty and technical know-how, are they revised annually? Or when are the next renewal dates, if you can share, which is the factorization.

[Unknown Executive]

Sir, I think I just need to check. I think whatever it is the royalty in technic fees, et cetera, is published in the last annual report, if I'm correct?

[Roopali Singh, executive]

Yes. So look, the current agreements are obviously in place and the amount that we are paying out as duly recorded in the financial statements, modifications, if any, that would come in, if they coming would obviously led Mr. Eswar just pointed out, go through the governance framework and the mechanism that is there, the Audit Committee kind of reviews it and goes to the Board of Directors. And if whatever necessary approvals are required to be obtained, would be obtained and details that are required to be shared out will be shared out.

[Umang Mehta, analyst]

Okay. Got it. And the second question was on margins. So as we stand today, what prices were to remain where they are and the trust you are seeing at the premium and continue, would you be confident that gross margins will continue to expand like they have this year. So when we think about next year, would you say that's a fair statement?

[Narasimhan Eswar, executive]

Sir, I think it's a very good question. However, I would love to know the answer to this question myself. And what I mean by that is, as you know very well, it's not just about premiumization. There's a lot of other things that are happening. There's commodity price increases that could happen or decreases that could happen. Oil prices could go up or it could go down. The dollar movement is also another thing. What happens with other currencies with respect to the Indian rupee with respect to component costs and detailed stuff that we buy. So there is a ton of things. What I can assure you is that this organization is spending all its time figuring out how to optimize every cost through our productivity for growth program. And obviously, I'll tell you the golden rule that I would like to follow is revenue growth, which is good.

Profit growth, which is ahead of revenue growth and the profit growth is driven by market share growth, and that is done profitably. This is the kind of formula that we like to do. And I truly believe that gross margin improvement is something that's at the corner of this strategy. That's how, frankly, I grew up running business. Grow your revenues, grow your gross margins, take some of your gross margins, put it into what we call marketing, what here we call staff cost, but it's actually marketing, put it into stuff that drives your demand and put some of it back into profit. And that is simply the formula that we're following. So will I be focused on gross margin, absolutely like a hawk. Can I guarantee the gross margin will be this or that -- absolutely not because it's so difficult to figure out what's happening next months, next quarter or next year.

So I can assure you our investors and our shareholders and our future investors that we are on it. You have seen the data. The only thing I can let the data do the talking, 15 months, we've grown the gross margin by 220 basis points a year ago. That's the data in front of you. Anything else I say is relevant because you can look at that and say answer yourself, maybe do these people have the capability to drive the margin. I hope I answered your question.

[Operator]

Next question is from the line of [ Shrinidhi ] from HSBC.

[Unknown Analyst]

Apologies for yet another question related to sell down. Sir, may I ask what is decision taken in consultation with India management team or what was a largely parent's decision?

[Unknown Executive]

No, sir, absolutely was not taken in line with India. It is not possible, actually, if we can imagine.

[Roopali Singh, executive]

Sir, maybe I'll come in. You will appreciate that the holding company is ultimately a shareholder. And the holding company takes its decision -- such decisions on its own without any consultation obviously, with the Indian management.

[Unknown Analyst]

Understood. Second question is related to how are employees at the leadership level at your level or level below you are taking this -- and are you seeing incremental attrition at the company at the senior levels.

[Narasimhan Eswar, executive]

So it is a significant change that we are going through. That's the fact. It's a significant change. It's not a minor thing that you can say, "Oh yes, whatever, let's carry on. "So we will carry on. But having said that, any change goes through a process of change management. And we are right now not even 5 or 6 days from the announcement, 5 working days from the announcement.

Our primary focus right now is speaking with our employees first. Making sure our employees understand to whatever extent we have the information, understand why the decision is being taken and what does it mean for us, how we can benefit and so on and so forth. We are speaking to our employees at every level, at many levels, I would say, personally to people and making sure that our employees are to the extent that they can, feeling clear about what the future could be and what the future [ go hold ] with the limited at this point in time amount of information we have regarding the change because as you just heard from Mr. Peters, many things need to be solved out the long-term license agreement, the long-term tech agreement, transition support, all of that stuff.

So firstly, that's what we have done with our employees. We've done the same with trade colleagues that we work with, the big customers trade people that we work with, done the same service partners. We've done the same with pretty much everybody, including with you now, right? So this is the process that we're going through. But as the employees, you can imagine it's a much more involved process. Firstly.

And secondly, I think what is important is I would like and I -- this is what I -- the leadership team and I actually discussed is we went through this last year, okay? Not this, but we went through a sale last year as an organization. And I would only ask the investor community and the shareholder community and all our well wishes to only think of one thing. 25%, 24% stake sale happened last year. Now that was not a walk in the park either, because that's pretty impressive stake sale.

But look at what we were able to do as an organization, and that is the importance of not getting distracted. We were able to gather together work on the goals that we said we need to work on, keep our eys focused on what we need to do. And we were able to deliver in the same period when the stake sale happen. I thing happened February, if I'm not wrong or February or March. And basically, if you see from April to December, where we should have been theoretically more distracted and messed up we ended up delivering a growth like I told you of 17% versus the previous year and 100% in profit versus the previous year. So I think it's very simple. We've got to stay focused on what we need to do, and that's what I think the leadership team is wanting to do -- and like I said, we are in touch with our employees and talking to them, but we can only use the past to hopefully be the predictor of the future.

[Unknown Analyst]

And the last one, if I may. In terms of medium-term targets, when you say high single-digit growth in the mid-high single-digit EBITDA margin, I was just wondering at the management level, do you see this whole washer with refrigerator category, including the premiumization tailwind and the penetration tailwind? Do you see this industry as the best high single-digit growth industry at India?

[Narasimhan Eswar, executive]

No, so that's not the intent. Like I clarified before, high single-digit revenue growth is what we said we do. And the reason we say that is because market goes to ups and downs. So if you see the market growth, as I showed in one of the charts, I did not say the numbers for obvious reasons, but I did share the kind of trend. Sometimes it's flattish. Sometimes the market grows by double digits and sometimes it goes by single digits.

So on average, we see the market growth itself that's not running in the double-digit kind of growth from a volume perspective, right? Then on top of that, what we then add on is the market share growth. So at this point, in fact, this guidance we had given last year we may take a look going forward as to whether we want to look at that, keep that change that. That is something that we'll consider as we go forward. At this point in time, I would not be giving any guidance different to the above.

Having said that, I want to clarify again, EBIT being high single digit, consistently, we have said is a long-term goal. And I think it's not possible for anybody to just jump from one EBIT number to another. You can do that if you don't care about revenue and you just want to cut costs, but I do not believe that a market like India is best served by operating like that. It's the right combination of revenue growth driven by market share growth and some amount of market growth, hopefully.

At the same time, margin growth, which results in profit growth. And if the profit growth is ahead of the margin growth, then the business is marching in the right direction for us. That is what we'll be focusing on.

[Operator]

Thank you very much. Ladies and gentlemen, we have come to the end of the allotted time. With this, I now hand the conference over to Ms. Roopali Singh for closing comments.

[Roopali Singh, executive]

Thank you, everyone, for joining us. Big thanks to Mr. Eswar and Mr. Jain as well, for providing all the business context. With that, we would close out the meeting. Thank you once again for joining in today.

[Operator]

Thank you very much. On behalf of Whirlpool of India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.