Ladies and gentlemen, good day, and welcome to the analyst call of Whirlpool of India Limited. We wish to inform you that all participant lines will be in the listen-only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the moderator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Sweta Srivastava, Company Secretary. Thank you, and over to you, ma'am.
Good evening, ladies and gentlemen. We welcome you to Whirlpool India's analyst call for the third quarter for the financial year ended 2025-2026. Along with me, we have the Chairman of the Board, Mr. Arvind Uppal, Mr. Narasimhan Eswar, Managing Director, and Mr. Aditya Jain, Chief Financial Officer of the company, also joining the call. A presentation on the business and financial results of the company is available on the website of the company, as well as the stock exchange. Before we move forward, I would like you to remind of the cautionary statement that forms part of the presentation. During this call, certain forward-looking statements may be made. These forward-looking statements are based on certain expectations, assumptions, and other factors, which may affect the business results. Please read the cautionary statement carefully, and the contents of this call should be interpreted accordingly.
With that, I would now like to hand it over to Mr. Eswar.
Thank you very much, Sweta. First, I would just like to introduce myself. I'm Narasimhan Eswar, Managing Director of the company. I'd like to welcome you to this analyst call. Thank you for taking out your time and joining us. Let me get on with the presentation. If I could ask you to please go to the section that basically has the agenda. There are three agenda items. The slide that says Agenda, there's business overview, strategic imperatives, and financial performance. I'll be covering the business overview and the strategic imperatives, and my colleague, Mr. Aditya Jain, will cover the financials. If you can just go to slide that says signed long-term contracts. So the first thing we'd just like to say is... Sorry, if you don't mind, that's the number at the bottom.
So I'll give you the number at the bottom of slide number six. Okay? So, slide number six. The first thing that we'd like to highlight is that we've been able to, we call it, secure the future of Whirlpool of India Limited. And we've been able to do that because we've signed transaction agreements with Whirlpool Corporation for the long term. Now, this was already placed into the market on the 16th of October 2025, but I'm just highlighting this. This is the first time that I'm speaking to a large group of analysts post that transaction. Now, what does it actually consist of? It comprises the following: firstly, the Brand License Agreement or the BLA. We have exclusive rights to use the Whirlpool brand in our territory for 30 years, and the royalty rates are extremely competitive.
These have already been shared with you. What is important is that we've got this, for a slightly expanded set of markets, so that's also helpful for us as we look towards the next 30 years. And the good news is that at the end of 30 years, we can have an option, between us and Whirlpool Corporation to renew for another 10 years at a time into eternity. The second part that we've been able to secure, which we're very happy about, is we've got the brand, but what about the technology? So we have, worked out a technological license agreement with the Whirlpool Corporation of U.S. to make sure we have access to current and future technology for major domestic appliances.
So these are in categories that we're currently covering, and they're also in a couple of categories that we're not currently covering, but the intent in refrigeration and washers, basically. And the intent will be to make sure that we have all the very best technology available to us going forward. On this one, we basically have it 10 years. For the next 10 years, it's done. And then after that, it's up to us, category by category, to renew as five years at a time. So this is even more good because we have the option to ask for the technology to be renewed five years at a time, after 10 years, if we need it. But if we feel we don't need it, then we don't need to take the technology. We can use our own technology.
So it's a very flexible, technology access agreement that guarantees us access to world-class technology. The third part of this agreement is basically the Transitional Service Agreement. Now, as you all know, typically, companies have a TSA that could be somewhere between 6-18 months long. Given the unique nature of this transaction, we have worked out with Whirlpool Corporation, written agreement that this will continue for us till March 2029. That's three years and four months from the date of signing of this agreement, which we feel is an advantage, because if the timing had been very short, then we would have had to kind of scramble to figure out how to get to our own systems of working going forward.
But now we have plenty of time to sit back, think through really well, what do we need to keep in the current systems? What do we need to delete? What do we need to modify? What do we need to add on? So we have enough opportunity for us to work out something really strong for us, in the next three and a half years. Lastly, on the service agreements, there's been a comprehensive service agreement also detailed out. We were taking some services from corporation, corporation was taking some services from us.
All of those have been clearly called out in the service agreements, and, one of the most critical things is that we were servicing the Global Technology Center, which we call GTEC, and that service agreement will continue until March 2029 to enable us to get to continuity and then adjust it as we go forward. Next slide, please. So now moving on to the business results, which was the other part that we need to discuss of Q3 2025, 2026. I'm now talking only Whirlpool of India Limited standalone results. At a very top-line level, I think we've been able to sustain market shares in what was quite a competitive market. A weak industry, but a competitive industry nevertheless, while growing profitability.
We've grown our revenue by 4% versus last year in a relatively weak industry environment, driven by weakness in refrigerators and air conditioners. We are very, very proud of our productivity for growth through the P4G cost takeout program, that led to delivery of 30%+ gross margin. With the result that our EBITDA growth is 47% versus last year, and our profit before tax, before exceptional items, which is basically the Wage Code, the new Wage Code that's been introduced. The profit before tax is 32% growth versus last year for Whirlpool of India standalone, without Elica. We are happy to see all the positive results come through from our ROI-based investments, which we use as our mantra. Lastly, operationally also, we seem to be doing the right thing so far. Our working capital is quite healthy.
We are again at a negative networking capital this quarter, and so that makes it four out of the last six quarters that we've had negative networking capital. Next slide, please. Moving on to slide number eight. This just shows you the numbers stacked up. As I said, as we began this year, the left part of the slide is basically standalone revenue growth versus last year, and the right part is standalone PBT before exceptional items versus last year. So you can see in AMJ, what actually happened was we were -3 on revenue, -2.8 on revenue, and our profits were flat in AMJ. In July, August, September, we were -5 on revenue, and profits were down significantly, -50, versus last year.
In October, November, December, we are up 3.8 on revenue, and we're up 32% on profit. So again, we keep focusing on trying to do what we can with a couple of critical things that happened between the April to September period, I would say. One is quite significant market decline on refrigerators, especially direct cool refrigerators. And the second one is, of course, extremely heavy competition, unseen kind of levels of price reductions that were happening in the market, which we did not necessarily follow all the time. Next slide, please. So this is the chart that I keep presenting in every session, but the way we've kind of worked it right now is to show a long-term picture. As you can see, the last row of this chart is our volume share.
This is basically volume share, multi-brand outlets, refrigerators and washers, just refrigerators and washers, including all refrigerators and washers. So Q4 2022-2023, we were losing triple digit basis points. So three red, dashes means triple digit decline in basis points. Two red dashes means double digit decline in basis points. Two positive pluses means double digit increase, minimum, like somewhere between 11 and 99, basis points increase, and so on. So as you can see, 2022-2023, last quarter, Jan to March 2023, we were losing triple digit basis points. April to September, we started course correcting it to get to double digit, basis points decline. Then October to March, we had a clear, double digit, strong double digit, basis point increase.
From April 2024 to December 2024, and even in January, February, we had basically triple-digit basis points increase versus last year, and that continued. The last 12 months, January to December, the market has been flattish, and our volume share has been just growing in single-digit basis points. As you will see later, this is driven a little bit more by direct cool, where we have quite high shares, and the competition has been extremely intensive.
Now, in spite of a very, I would say, very weak market this year for refrigerators and washing machines, driven by poor market and refrigerator, and in spite of extremely heavy competition, especially on pricing, we were still able to keep our overall volume share above water, keep our head above water in the overall volume shares, because we were able to introduce a lot of new products in the market this year. There was, glass door products we introduced in both DC and in Frost Free, including the Pride of India series, which I'll show you later. There was also a Frost Free we had in the L16 range. We were able to bring, glass door refrigerators. We drove the auto defrost in single door refrigerators, as well as the water dispenser in semi-automatic.
Expanded those really hard, and we also brought in premium ranges in the air conditioners. We added additional detail executives, and finally, as a matter of last resort, we ended up trying to take the right decision sometimes when we needed to for maintaining pricing indices. Net, net, these are the things that led to us holding our share in a very, very tough year. Next slide, please. So this is again, the breakup that I always show you. These are the volume shares across categories. So just to show you, how does it look across categories? So as you can see, in the 12 months, the last column is the 12 months, 2025, January to December 2025.
So if you see the 12 months, January to December 2025, we have grown triple-digit basis points on the front load washer business, which is fine because it's not a very high a high share business for us right now, so there's opportunity to grow. We have grown strong double-digit basis points on both no frost and semi-automatic washers. That I think we are quite happy with, but we'd like to move it even further. So both in no frost refrigerator and semi-automatic washers, we've grown upwards of 40, 50 basis points. The two categories where the maximum challenge happened on shares was basically on direct cool and on top load, both of which where we have very high shares. In direct cool, direct cool, our shares are well upwards of 20%.
That's the area in which we've not been able to grow share in the calendar year 2025. That's something that we'll be looking forward to course-correct as we go along with great new initiatives. On the top load washers as well, it has been extremely competitive. As you can see, both on DC, direct cool, and on top load, literally for the last two years, we've had triple-digit basis point share growth. So from, let's say, almost like September, October 2023, till January 2025, we had significant share growth.
Now, we are starting to see that share kind of stop or slightly decline or slightly increase in the case of top load washes, and that's something that we are extremely conscious of, and we will continue to plan to grow those shares going forward slightly. Sorry. This would then consolidate our top three position. In direct cool refrigerator, we are typically either number one or number two, even in the last 12 months. Similarly, in semi-automatic, we've been number two in six or seven of the last 12 months, seven of the last 12 months. Top load, we are within touching distance of getting to a number two position, not more than 100 basis points away.
Of course, in no frost and in front load, we have a lot of work to do, especially in front load. No frost, we are in mid-double-digit kind of market shares already, but again, plenty of opportunity for us to grow in those two. Thank you. Now, if I look at the cost productivity programs, moving on to our financials, we continue to drive strong P4G cost productivity programs that drive gross margin improvement. Now, here is a chart that just shows you what's been happening from H1 2022-2023. As you can see, H1 to H2 2022- 2023 moved up by 30 basis points. Again, from H2 to H1 2023-2024 by another 30 basis points. H1 2023-2024 to H2 2023-2024, we moved up 190 basis points.
Then from there, we've again moved up thirty basis points in H1 2024-2025, another sixty basis points in H2 2024-2025. Now, if you then switch it and look at the nine months ended December for the fiscal year 2025-2026, again, you'll see that in the nine months, we've moved from a 30.3% gross margin to a 30.8% gross margin. Obviously, so we are quite happy with that. There will obviously be some challenges, I'm sure, at some point in time. But the intent really is that more often than not, to keep growing the gross margin, as that will help fuel any plans that we have to reinvest on high ROI ideas. That would be our strategy always going forward. Next slide, please.
The other thing that we're quite happy about is our net working capital. Like I said earlier, starting from April 2024, we were able to start working. Obviously, all of the work done in the previous year, 2023, you know, all of 2023 and 2024, we did the work, and then started paying off around September 2024, which is the working capital percentage net revenue. As I said, in the last four out of the last six months, we've had negative working capital as a percentage of net revenue. Thank you. Next slide, please. That's the perspective I wanted to provide from the business point of view. Now, I'll move on to the strategic imperatives.
So we've got our strategic imperatives here: Inspire generations with our brand, win with product leadership, build a competitive and resilient supply chain, and excellence in execution. Next slide, please. Slide 15. This is just our history of Inspire with our brands. Our chairman is right here, and the chairman is, has been the managing director of Whirlpool in the past, and some of this is what he has done. Whether it was, pedestals, whether it was auto defrost, the Three Door R efrigerator, which we call, excuse me, which we call Protton, the dark interiors which we call Platina, the first VA heater. So Whirlpool has been a pioneer in the India durables industry, and we continue that trend as we go along. The next slide, please.
So our ADF, which is the auto defrost, proposition in direct cool refrigerators, it continues to grow well. We have refreshed our, on-pack stickers to basically call it No Tension refrigerator, because that's what it does. Core DC consumers' biggest pain point is ice walls that build up, and it causes them a lot of trouble to get that sorted out, and auto defrost automatically takes care of no icing on your, walls. And that proposition is something that we are driving, and that's doing very well. Next slide, please. These are some of the photographs of the, glass doors that we introduced on our direct cool refrigerators. This is called the Pride of India design. You will see that there is a very, very Indian touch to these.
These are not the usual flowers and so on and so forth that you see in the market. These are absolutely customized to what you see in India in terms of design elements. You can see the stuff on the right. It looks like something from a very famous movie, you know, the sari from a very famous movie, which I'm sure some of you will recognize. And you see some of the stuff on the left. This is to do with what you can see in architecture in India as you go through. Next slide, please. We also did the same thing with glass doors in the Frost Free collection. We introduced the Lapis Grandé, which is a premium glass door collection, which is also doing very well in the market. Next slide, please.
In Frost Free, again, we have the best-in-class performance on convertibility. As we know, convertibility is something Indian consumers are really fond of. But what you really want when you have a convertible is you want to be able to switch it to a convertible, move it to a, from a freezer to a fridge in the fastest possible time. So we have the performance and the claim to basically able to say, we'll convert from a freezer to a fridge in just over 10 minutes, which is an incredibly fast time. But that's what the Indian consumer wants, and that's why we designed it. Next slide, please. Another thing on Frost Free, to show you the kind of focus we have on Frost Free, this is the new Three Door Protton range that we have brought in.
This had not been updated for about five or six years, so we brought this in, and with the blessings of our chairman, who gave his green light to it after having seen the design. And we were able to put this into the market. Seems like quite an exciting start. This brings the magic of three doors, and the big claims here are 43% less cold air loss versus top mount, 360 degrees enhanced cooling with FreshF low and no odor mixing. And we have done all this with a capacity upgrade, which means the consumer gets more space, basically, than what they had before. Next one, please. And this is something that we're very proud of, this re-conceptual-
This is the operator here. Are you able to hear me at the management room? Ladies and gentlemen, please stay connected as we check the line for the management. Ladies and gentlemen, we have the management reconnected. Ma'am, you may go ahead.
Yes. So, Mr. Narasimhan Eswar will continue with his presentation.
... Over to you, Mr.
Yeah, hello. Sorry about that. I don't know how we got kicked out of our own call, but I guess it happens. Well, moving on to the Dynamix technology. I think, this one that we did in semi-automatic is something we're very proud of, like I was saying before I got cut off. Semi-automatic washing machine users, the biggest problem that they face is detergent patches staying on their clothes. This is a technology that we came up with, worked it out in 2023, towards mid and end of 2023, and launched in 2024. And it's been a very, very strong win for us, driving our market shares.
Today, this Dynamix technology, which ensures zero detergent patches with semi-automatic washing machine users who use powder mostly, this covers 45% of our business, basically, 45% of the category, the entire category. So this is something that we're very proud of, having done this in the last couple of years only. Next slide, please. The front-load washers business for us continues to accelerate. It's not shocking because it's on a smaller base, but we've grown the business about 50%, greater than last year, and the market shares have been growing on triple digit basis points versus last year. Next slide, please. So is the case with our AC business. Both of these we have low shares, and AC business, therefore, is also scaling up.
We've got greater than 50% growth in CY 2025, calendar year 2025, with our new ranges of air conditioners that we launched in the market, which we are reasonably happy about. Next slide, please. And of course, with Elica, a fantastic brand, we continue to drive premiumization to premium product ranges, whether it's filterless and auto clean kitchen hood, or whether it's a built-in oven with air fryer function, or whether we do it with the direct flame Flexi Hob top. Quite happy with the kind of initiatives that are coming through in Elica as well. Yes, please. If I move now to execution, we continue to work on excellence and execution.
Our aim is to win every day in every store with every consumer, knowing that they will not come back to the market, at least for that category, for another 7-8 years, if not 10 years. Getting the pricing right, making sure that we have strong visibility, and making sure we track that on a daily basis. Making sure that our incentivization has happened on sales and service to drive premiumization and value, which we started from January 2024, and making sure we leverage our great customer relationships for a win-win situation for both us and our customer partners. We've also continued to see good improvement in our Net Promoter Scores, which is the measure for service.
We continue to see that improving strongly, both through our service provider network that we have across the country, as well as our in-house service centers that we have set up in 2022. One other thing that we are quite happy about is that we were able to transition to a new number, which is not that easy. This was for two reasons: one is for simplicity and the other is for a significant cost saving. Very happy about that as well. Next slide, please. Like I said, P4G is at the core of our business.
We in the last two years, from fiscal year 2023 to the nine months in fiscal year 2026, we had a standalone gross margin improvement of 320 basis points, and this is all a result of the P4G program that we do. Next slide, please. I will now hand over to my colleague, Aditya, CFO, to take you through the financials.
Thank you, Mr. Eswar. I'll now take you through the financial performance of Whirlpool of India Limited. Let's to next slide. I'm on slide 28. This slide talks about the Q3 financials for Whirlpool of India on a standalone basis. In Q3, we delivered a top line of INR 1,624 crore at a growth of 3%. The revenue growth was driven by a couple of factors. The first one was all the actions we took on the product, and the execution side helped us grow market share in washers. And we also saw a growth in our air con business, which was relatively higher than the rest of the business. So given that, the value of the air con is much higher, that helps us on the revenue growth side.
Second factor was the industry growth. In this quarter, we saw a low single-digit industry growth, basically driven by the festival demand. We had Diwali falling within this quarter, and that's where we saw a little bit of pickup of demand, and that also helped the revenue. And C, our focused ROI-based initiatives of driving segment and category premiumization, and which also helps drive our revenue. On the profitability side, we delivered EBITDA of INR 65 crore. That's a very healthy growth of 47% versus last year. And EBITDA margin was at 4%, an expansion of 120 basis points versus last year. The improvement in EBITDA was predominantly on account of the higher volume in revenue, which translates into a higher DCM, the absolute DCM, and hence drives an EBITDA improvement.
On the cost productivity sides, we have a robust P4G program, and we look at all lines of the P&L from a cost productivity point of view, and the team did a great job in managing the cost productivity, and as a result of which, we were able to offset a lot of price index maintenance actions, which we needed to do during the quarter. C, the expansion of our premium and high-margin portfolio also helped in driving our EBITDA improvement. Our PBT, before exceptional items, was at INR 48 crore, which is again a healthy growth of 32% versus last year. Reported PBT, however, declined by 60% in this quarter, and this was due to the fact that we had to account for a one-time wage code provision of INR 33.4 crore on a standalone basis. I'm on slide 29.
Slide 29 talks about the consolidated performance for Whirlpool of India. Consolidated here means it includes the performance of our Elica business as well. On a consolidated basis, we delivered a revenue of INR 1,774 crore, at a growth of 4% versus last year on a consolidated basis. Our Elica business grew in high single digits during this quarter. Our EBITDA came in at 90.9, roughly 91 crore at 5%, at a growth of 31%. And PBT, before exceptional items, came in at 71.7 crore at 4%. PBT grew by 21% versus last year. Our Elica business, apart from growing in healthy single digits, also continues to deliver a very healthy double-digit margins.
On a reported basis, again, the PBT declined by 45% on account of one-time wage code provisions, and that number was INR 38.8 crores on a consolidated basis. Let's move to the next slide. I'm on slide 30. This slide will summarize the nine months for the period ended December 2025 performance for Whirlpool of India on a consolidated basis. On a nine-months basis, we delivered a top line of INR 5,853 crores. That was a marginal decline of 1% versus last year. The decline in revenue was mainly on account of industry. As we all know that, April, May, June quarter, which from a seasonality point of view, is the biggest quarter for the business, had a weak industry on account of delayed and weak summers.
Though we saw some recovery in the latter half of the year, but then the impact on a nine-month basis is still negative. This impact was offset by a market share improvement in washers for us and the growth in air conditioners and Elica business. The market shares on refrigerators was more flattish for us, and our focus deferred to drive premiumization, which helps again on the revenue growth, helped us offset the impact of the industry decline, which we saw in this quarter. Mr. Eswar also spoke about the trend of the gross margin and the journey of the gross margin improvement, even on nine months basis.
Given the headwinds on RMI, given the headwinds on Forex, et cetera, as a result of all the P4G and the cost reduction programs, we've seen and offset the impact of all the RMI and FX and delivered a gross margin improvement of 62 basis points versus last year. Our PBT, before exceptional items, was at INR 316 crore at 5.4%, a decline of 4% versus last year. And reported PBT declined by 13%, mainly on account of one-time wage code provisions. Yep. I think that's from the financial side. With this, I'll pass it back to Sweta for the Q&A session.
Thank you, Mr. Eswar and Mr. Jain. I would now request the moderator to open the Q&A session.
Thank you. We will now begin the question answer session. Participants present on the audio bridge, who wish to ask a question, may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Once the question answer session begins and the name of the participant is announced by the moderator, then his or her line will be unmuted by the moderator. For clarity of questions and better audio experience, the participants are requested to ensure that while asking questions, they're using headphones to avoid background noise. In the interest of time, we sincerely request the participants to limit their questions to two only. We will now begin the question answer session. We wait for a moment while the question queue assembles. We have the first question from the line of Ankit Merchant from Kotak Securities.
Please go ahead.
Hello, am I audible?
Yes, yes, please go ahead.
Yeah. So, my first question was, sir, that, you know, the corporation earlier had, you know, given an intention that they want to reduce the stake to 20% by December, right? Now, they've, they've sold a bit of it and still stands at 40%. My question is that, you know, is there any now change to the timeline, where they want to divest and whether they want to... They have said anything about divesting 20%, or has that changed as well? And, you know, what are the constraints that you guys are seeing in terms of regulatory constraints or valuation constraints that are delaying the execution?
So, I will be very honest with you, what the corporation will do or will not do is something that I cannot speak on at all, as you know very well, because just like any shareholder, like you yourself, the shareholders, esteemed shareholders of ours-
... nobody tells us whether they want to sell or buy or do whatever they want. Their shares are theirs, and they are free to do what they want to do with those shares. So we are not privy to any information more than what you are privy to, especially since October 16, especially so where there is very limited kind of communication and definitely none on this topic. So I'm not able to provide you any color at all. The best way to do that would probably be to just read the transcript of the latest shareholders meeting that they had in the U.S., or maybe approach the corporation, but then that would be a bit unusual.
The point I'm trying to make is they are shareholders, and they are wanting to sell, and it's not something which we are discussing and doing, just to be clear. I hope I answered your question honestly.
Yeah. So, on the other side, the main intention of the stake sale was that we will get more operational flexibility. We'll be able to focus more on the India business as well, without much interference. Given that, you know, they've sold some kind of a stake, right, in the open market, have we seen any autonomy or freedom, you know, post that in how we make decisions, in how the board is, in how the board works, or has there been any reconstitution in the board?
Oh, so the board stays exactly the same as before.
Okay.
Our board chairman of the board is here with me, and I'm sure when I finish speaking, he would like to add on.
Yeah.
Our board has guided us always through this business, even through 2025, when all of these big agreements had to be signed, these four big agreements that I spoke of right at the beginning. We had right at the beginning, in February itself, instituted what was a transition committee, which comprised three independent directors, and they basically sat with us, two independent directors and a non-executive director, plus myself and the CFO. They kind of advised us through that whole transition process and all of the negotiations that we had with the corporation. They blessed all the documents as they went through, and have been with them, and the board have been a huge help to us in working this through.
In terms of your second question, so the board, just to be clear, is fully and deeply involved in the business, from an advisory point of view, as they should be. The second thing is that as far as we are concerned, we are frankly very excited. We have been ever since we signed those four documents, because that gives us a lot of energy, that our future is secure, that our shareholders' future is secure. And we have been working ever since, trying to figure out what else to do. I think it's early days, but hopefully, in the next two to three years, we'll be able to show you some of what, you know, that new flexibility is in that sense. So I'm just going to turn it over now to the Chairman of the Board, Mr. Arvind Uppal, for his perspective.
Yeah. Hi, Ankit. Good afternoon.
Good afternoon.
It's a very fair question. There's no doubt the corporation used to support the management team in India.
Mm-hmm.
Now, given that they will not be closely in touch with the management team anymore, the board is stepping up to provide support to Nachi, to, to, Ish-- Mr. Eswar, in whatever respects. If you look at the latest board meeting that we just had, we've created, we're doing two things. One, we've just created a committee. It's called the Strategic Oversight Committee, which will be there to support the managing director and the management team. This will comprise of me, and we are bringing, Mr. Anil Berera on board. He, if you may recall, he was the CFO for the longest time. So two very experienced, ex-Whirlpool people, and they will be backing up, the managing director in whatever respect he wants. So at, so at this point in time, the board is very confident.
He has delivered fantastic results so far, and despite all the chaos and noise that has been happening around us, I think we've done a great job. So now as this settles down, I think we should see far better output. I have no doubt about that. So yeah, thank you. I hope that answers your question.
Yeah, sir. My next question is to Eswar, sir, that, you know, given that, you know, we've seen good trajectory going forward. Over the medium term, over the next three to five years, what kind of growth are we seeing compared to the industry? Do we outperform the market? Are we in line with the market? Do we underperform? And you know, what gives you the confidence that you will probably, you know, be in line with the market or probably above that?
Okay, it's a great question. Probably a question on a lot of people's minds, so I will take some time to answer this question. So the core categories that we play in. So firstly, we are a refrigerators and washing machine-focused player. Like, we've said that in the long run, we want to be at the top of the leaderboard. That's why we come to office every day. We don't come to office to be number three or number two, frankly, okay? And I'm not saying long run means three years or five years. It might be eight years or nine years, that's fine, but that's the eventual path. Now, within refrigerators and washing machines, we have certain categories like DC. Now, in DC, we're already doing pretty well in direct cool refrigerators in terms of market position.
The intent would be to grow the DC business going forward by de-commoditizing it. I'm not going to get into detail of how, but to do that, to give offerings that are unique, differentiated, and de-commoditized, so that we can actually grow and become the leaders in the DC category. And that basically means that given our very high shares in DC, I don't think it's very easy to get, you know, 100 basis points or something like that in DC year-on-year. It's very difficult when you are at our share. But growing the DC category every year would be, for me, the right target to go. Modest increases, maybe 20, maybe 30 basis points a year, we'll see. Second, if I look at semi-automatic. In semi-automatic, we are number two, sometimes number three, sometimes number two.
That is one in which we want to, again, grow our market shares, but grow it in not only the entry, but also in the, in the premium segments, which is what we've been doing over the last two years. We've been slowly moving our business up towards the premium segments, and I hope to continue to see that happen, again, through de-commoditizing the category by offering products that have a point of difference, that are not the usual run-of-the-mill stuff, and make that the base on which we grow. So in semi-automatic as well, like DC, competition incredibly tough. Not that it's easy in the others, but it's especially on pricing, very tough. And therefore, I would expect to see only a modest growth in share growth, going forward for the next five years. I'm talking again, everything over five years.
Now, now comes top load. Now, top load is something in which I think, again, similar to the first two categories, we have a very high share already, but we do have a fantastic product portfolio that we can fully leverage. Right now, it's not at all fully leveraged, in many ways. And so I expect to see us use this top end to mid-end of the product portfolio to grow our shares. Again, modest basis points over the next five years. Then come the two other interesting categories, where our shares are, have a bit of an opportunity. One is Frost Free. Frost Free, we are in the mid-single digits. Sorry, so, so sorry, mid-double digits. I meant mid-double digits. And I think there is opportunity to take that up further, more in line with our DC or our, top load kind of washing machine shares.
And so I see that as a very interesting opportunity. In this particular segment, unlike the first three that I mentioned, there are sizes in which we don't play today, and those are very interesting spaces for us, and those are very attractive spaces for us. So that's obviously of tremendous interest to us. And we will be looking to max out in those spaces as well, right? So I see a lot of potential in frost-free for us, compared to some other firms. And lastly, we come to front-load washing machines. In front-load washing machines, we have tremendous opportunity. We've got great products with our ozone technology, which are unique. We have very low market shares, still less than 5% volume market share for us. And if you see the rest of our washing machines, they are somewhere between 15%-19%.
So huge opportunity. Brand name, very well known in washing machines. It's just a matter of putting it all together and making it happen in a very, very tough and competitive market. So as I look to see across these five categories, you can see how we can grow our market share, relatively smaller in some categories and much higher in other categories, through the right innovation, the right go-to-market, the right execution, and always fueled by our P 4 G program, which gives us the gross margin improvements that we can funnel back into the business. Of course, I have not mentioned other interesting category for us, air conditioners. We are a smaller player in this category, but coming along well. This is a very fast-growing category. We will be very sensible about how we grow in this category.
It can be a category in which if the season doesn't come through well, you could be sitting on tons and tons of inventory. So we will always manage this kind of dichotomy, which is high growth, but you've got to manage the inventory. So this is something that we will also be focusing on, and air conditioners will be the other revenue driver. So the portfolio position for it will be a revenue driver, not so much a profit driver, because the profit, the margins in an air conditioner, typically for the industry, are lower than the margins for refrigerators and washers, right? But it is a revenue driver, which helps. In addition to these, this is the freedom and flexibility that we spoke of, we also have opportunities to open up other related categories within the cooling space.
We also have the opportunity to look at other categories outside of these. And then on top, the cherry on the cake is, of course, Elica, which is a highly underpenetrated category, less than 5% penetration for these categories, in India. Fantastic products, amazing design, great traction. So this is something that we will be looking to build. So we have clear core categories that we know what to do, what sort of products we need to launch. We have some categories in which we are not yet at optimal share at all, and we have huge plans to grow those categories. And then, of course, we have gems like, the kitchen, space with Elica and Whirlpool, by the way. We've got two brands in the kitchen space that we can actually grow.
So I would say from a revenue point of view, we have a lot of opportunities in the next five years. I would really look forward to strong growth in the next five years. Previously, I had talked about high single-digit CAGR. Assuming that the market is also working, 'cause that's, I think, the most critical thing in the Indian market, the market also needs to grow. If the market were to grow slightly ahead of GDP... Then I don't see why the high single digit cannot become an early double digit kind of growth number on revenue over a five-year period.
The profit part of it, I would say, this is going to be a little up and down across the next year or so, because we've got two or three things which are important for us to kind of understand. In this industry, the durables industry, regulations are very critical. Regulatory costs are very high because it's an engineering industry. It's not just, you know, make one product. There's, like, hundreds and hundreds of components in every refrigerator or washing machine. And many of them have regulatory impacts on them. So regulatory cost is one thing that will impact the entire industry. And of course, as we go forward, we need to make sure that we can manage costs through our P4G programs well.
So our profitability is something, with the heavy, heavy competition that we have in this industry, I do feel that profitability will also grow, but it will grow modestly. I don't think it'll have breakthrough growth and profitability. The only thing that can change that is either if, market prices are up to take care of the regulatory costs completely, or indeed, you have some kind of, help with respect to, commodities or, you know, things like that, that can come your way. So a bit tricky to predict. We'll focus on driving the top line and keeping to our discipline, operational rigor on managing all the costs, and that's our way forward. Did I answer your question?
Yes, sir. Yes, sir. Thank you for the detailed explanation, sir. Just one last question I have. I just wanted to understand, with the new energy ratings that have come in in January, what is the impact on our company? And, you know, what kind of price hikes have we taken across the board?
Okay. So, the energy ratings have come in January in air conditioners and in refrigerators, and we have started putting our new products out there already. New manufacturing of new products has already started, exactly as per schedule. There is no issue on any, not even a single SKU that we have. So all the manufacturing has gone exactly as per plan. So we are well prepared for it, so you'll be happy to know that we're well prepared for it. We are not right now talking about any price increase, et cetera, or communicating what we've done in the market, because we're waiting and watching to see what happens in the market. And depending on that, we will take dynamic decisions. We look at pricing literally on a monthly basis.
We will take those dynamic decisions as we go forward.
Thank you, sir. Thank you for your time and for the detailed answer.
Well done. Thank you.
Thank you. We have the next question from the line of Vinay Agarwal from Invisage Capital. Please go ahead.
Hi. Am I audible?
Yes, yes, Mr. Agarwal, please go ahead.
Hi, thanks, Mr. for doing this, and for taking my question. I just had a couple of questions with, with Whirlpool's, you know, the corporation stake going down to 40%, and then I look at the incentivization for top management, a large part of it is still based on sort of, the shares of the parent. And then one more question, which I had was, when I look at the board, a couple of board members are also advisors or partners in some private equity firms who were also sort of want to be potential buyers. Then how, how do you-- how does the board manage that conflict?
You say that corporation, what they do, we don't have a say in that, but I'm just wondering with the board and CEO how does this thing work? Because just wondering that, if you can throw some light on that.
Sure, sure. Thank you, Mr. Agarwal. On the incentivization, just like to clarify that, as of 28th November, when the corporation sold its last stake and therefore was not a majority shareholder anymore, I can assure you that all future ESOP plans that are given to top leadership of the company, which are performance-based, will not be anything to do with corporation. That has been already decided well in advance by mutual consent. Any ESOP plans that we give to corp to our people going forward will be based on India performance and India performance alone. So, I just wanted to make that very clear.
We are in the process of working through these details with the board, and we hope to have something in front of shareholders soon. As you can imagine, it's a complex process. We now have to do this on top of our day-to-day running of the business. So we are working through with the board's help, who have a lot of experience in this area as well. But we're working through those things with some external people helping us, and we should be able to place something in front of you pretty soon, hopefully, for your approval. And then once it's approved, it will be rolled out into the plans for the leadership team. So that's the answer to the first question.
The answer to the second question is, you had asked specifically about something to do with the details of the transaction. Mr. Agarwal, I can say only the following things to you. First is, it is not correct of me to talk about any confidential transactions that were happening or did happen or did not happen. That would not be right, because it would be something that has not been released by the corporation or my company. What I can tell you is, if at all such a thing had happened, number one, we would have, as a matter of process, taken a clear declaration from the people involved about the fact that they have no knowledge of what was happening there. Number two, we would have taken such a declaration from parties that were talking to us, right?
Number three, we would have made sure that these people were not involved. You have to please trust us on this, and it's very difficult for me to make comments about speculative statements. It would not be correct legally for me to answer this question in any way other than what I'm answering right now, and I would genuinely appreciate if we please keep it to stuff that I am able to answer, if that's okay.
Yeah. Thank you, Mr. Eswar, and the point on ESOP is much appreciated. That will be great. Can I ask just one more question? We attended the parent's call also, and they spoke about a number of new products that they are launching. Will some of those new products come to India as well, or will it be a part of, you know, if not now, but later, we will have access to those new products?
Oh, yes, it is-
If they are suitable at all.
It is quite possible that when the market, when the Indian market is ready for such products, you know, we can bring them in. Like I said, so long as they are referring to refrigerators and washing machines and related categories. There are other areas like KitchenAid, which we don't have access to. So just to be clear, KitchenAid was not part of this discussion for us. KitchenAid is run-- That's because KitchenAid is run independently as a business by Whirlpool globally for strategic reasons. KitchenAid, even if KitchenAid makes a washing machine or KitchenAid makes a refrigerator, not that it is making it, but if it did, that would be KitchenAid technology. But all of Whirlpool Corporation stuff, we absolutely have access to. Yes, sir. And, as and when we need stuff, we will be able to access it with Whirlpool Corporation's blessing.
Yes.
Right. And just the last question, the cash in the balance sheet, in terms of sort of a higher, we would pretty like a higher dividend payout, or does the board even consider a buyback, or maybe it's difficult given the situation the company is in right now?
Yes, sir. Actually, at this point in time, we can. It's a good point. At this point in time, we are not really working on that area yet. We will start to work on that area. But I see cash, there is plenty of use for cash that we can do. We also have a lot of cash, it's true. Firstly, there is ongoing operations. Secondly, there is CapEx for new projects that we can do. Thirdly, we could be looking at what is interesting in the market. Decisions, for example, a three-year payback or a two-year payback or a four-year payback on something that can reduce the cost of P&L on ongoing basis, much, much lower.
These are all kind of things that we'll be looking at, and I think our execution will only be limited by our ability to work through the details. So, I think there are plenty of areas we can look at, and of course, the areas that you mentioned are also areas that one could look at. So we will look to all those things and take the board's advice across the next few months. It will take some time, but we will be working on it very actively now. Thank you.
Thank you very much. Thank you. Thank you, Mr. Eswar.
Thank you. We have the next question from the line of Priyank from Vallum Capital. Please go ahead.
Yeah. Hi, sir. Wonderful and great to see the kind of operational performance that we are witnessing despite all the ownership changes to the company. So my first question is: in the interim quarters, you did mention that there has been extraordinary competitive pricing and promotions in the industry, and that was visible given that some large players prioritized pushing versus pulling. Do you see this competitive intensity normalizing now and your organic business actions resulting into market share gains plus margins improvement? That is my first question.
Okay, let me answer this question. Your observations are very interesting indeed. Sir, to be honest with you, I wish I could give you an answer to this, but the honest answer is, I don't know. So that's why I said I'll have to dynamically keep looking at what's happening in the market. This is a very, very, very competitive market. If you see the number of brands that have been introduced in refrigerators and washing machines in the last six years, it's unbelievable. And with every new brand comes a theoretical fair share loss of market share that we need to fight against. And new players who come in typically try to use pricing or discounting as a way of getting market share. That's what makes it very competitive, right?
So in this context, we will just keep watching, what's happening in the market and take our actions according to that, to always make sure we have a competitive pricing and prices in the market. And that's the best that I can say. As far as the second point that you mentioned, which is, margins are concerned, margins are going to be impacted by pricing, but they're also going to be impacted by a lot of things. There is a significant regulatory impact that will happen in calendar year 2026 because of this refrigerators and air conditioners. You know, for many companies, it's 50, 60, 70% of their portfolio, being the two biggest categories... entire refrigerator and air conditioner is going through this, energy change.
Therefore, if you cannot take the full pricing out from the market, then it will impact different companies, maybe in different ways, but more or less it will impact everybody. We need to take a look at that. The second thing for us, particularly, is that 2026, 2027 will be the year of our transition from being basically there are some impacts that we've already declared in our October 16 statement that we put out of the public domain. That will happen as a result of our becoming not a majority-owned Whirlpool company, right? So based on that also, there will be some transition impacts financially. So I would just say that for 2026, 2027, my intent would be to try and drive my revenue. Intent would be to try and drive my market share in a financially sensible way.
I think of all the years I've been in, this would be probably from a profit point of view, structurally, the most challenging year, because you've got entire refrigerators and air conditioners all, going up in regulation in the same year. Plus, you've got the year in which we are moving from, you know, is the full financial in which we are moving to a completely independent entity with the attendant, let's say, cost, transition costs that basically impact our P&L. So that, I think, is what I would say. And after the year of transition, I think you will end up, for me, in a situation where we should be able to continue our strong progress, basically, in terms of margin improvement.
Sorry, sir, just a follow-on and a clarification. On the BEE ratings, energy ratings change, what would be the pricing impact or the correction that we would need to take if in case we need to keep the-- or the industry needs to keep the margins intact? And I'm not sure, what would be the transitionary impact on the P&L, if in case it, which is, which is supposed to happen this year? If you can quantify these two things.
Lastly, as I close my questions, on the capital allocation part, in case if there are no clear prioritizing, priorities, lined up in terms of, large CapEx or Elica investment or a new categories to be, to be implemented immediately, maybe we can prioritize returning back some of the capital back to the, the rightful owners of the, of the company. So that's my suggestion and clarification question. Thank you.
Thank you, sir. So on the BEE pricing, I'm afraid we are not declaring that at all. We are not sharing that because that is different for different companies, depending on where they are, and that is highly confidential information, which would actually be inimical to our interests to share in the public domain. As far as the transition is concerned, all of the information is fully available in the documents that we've released on October sixteenth. Kindly take a look at that. All of the information is there. October seventeenth, I think, sorry. Sixteenth was the signing, seventeenth is when we released it, probably. But please take a look at that. Lastly, on the CapEx, sir, we hear you. I think that is something that we will, like I said, I already answered this question before.
Please take a look at all the options that we have for cash utilization, work through with the board, take the board's advice, and then come to you when we need to come to you, if that's okay. Thank you so much.
Thank you. We have the next question from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Thank you for the opportunity, sir. So my first question is on Elica. So, you know, you've had Elica in your portfolio for a couple of years now, and now with the, you know, with this transaction coming through, what kind of aggression that you believe you'll be able to, you know, carry out in this part of the business? And how should we think about the scalability of this vertical, over the next, say, three to four years?
Wonderful question, sir. As I mentioned, Elica is something that we feel is a tremendous brand, built really, really well by the people who built this brand from the beginning. The time is quite good for us, basically, as we look to the new financial year, to start looking at how should we be dealing with Elica. And in my view, as we discussed with the board as well, Elica is operating at very strong EBIT margins, PBT margins. The really interesting question for us would be: What is the trade-off between that PBT margin or maybe a couple of hundred basis points lower and the revenue? So that is something that we are actively looking into, we are actively discussing.
There has to be some investment to happen to get it going from a 5, 6, 7, 8% revenue growth to a very strong double-digit revenue growth. So we prefer for ourselves that Elica is growing strongly, and even if it were to grow at a lesser margin, but growing strongly. That's the kind of model that would probably make most sense for Whirlpool of India going forward, which is a very direct answer to your question.
Sure, sir. And so my second question, you know, is on the DC refrigerators and the semi-automatic washing machines, right? So, you know, over the last four or five years, we've rarely seen pricing go up in the category. And you yourself mentioned that, you know, number of players are entering the space. So, you know, if the core categories are sort of getting commoditized, you know, how should we think about Whirlpool sort of, you know, getting... I mean, you mentioned some of the new categories that you're thinking about... But, you know, a little more color in the sense that if you could just spell out what should be the contribution of some of these emerging categories, say, three years out, or, you know, what is the share that you'd like?
Because, you know, these two categories are getting increasingly commoditized.
No, that's a very good observation. So what has happened in DC, I would say more in SA than in DC, is that there are two things that have basically become the key drivers of a semi-automatic business in the last, say, three, four years, I would say. One is because the number of entrants coming in, pricing has become a very important thing. So lower you sell, you know, the more market share you get kind of thing. The second thing that's happened is, capacity, which is the size of the machine. So let's sell 9 kg for the price of 8 kg. Let's sell 10 kg for the price of 9 kg. Again, it's a pricing game, but it comes in a different avatar, which is capacity.
What we are trying to do is for both categories, DC and SA, de-commoditize it, and I think that is where the differential can come. See, in every category, in my view, you need to have a point of difference. Why should a person prefer to buy your product than somebody else's product, right? And that cannot happen if you commoditize the category. If you just bring it down to price, and the color of the box, and the number of kilograms that it can take, then you commoditize the category. So all our efforts, without going too much into detail, will be into de-commoditizing the category. For example, you drive the aesthetic design of DC fantastically through glass doors, right? You give people... Because if you go to DC homes, you will actually find in many homes, the DC refrigerator is actually in the living room, okay?
It is not in the bathroom, it is not in the kitchen, it's in the living room. It is like a showpiece. So if that is the case, then one of the insights is why don't we make it extremely attractive to look at, to display? So that is where glass doors have a major role to play. So that's one example of de-commoditization, but there's others. You take a technology like auto defrost. That is something that we have that's unique in the market, amongst the large players. And it solves the number one pain point of DC consumers. Now, today, it might be at a certain percentage of the market. Why can't it be 75% of the market? Then you've de-commoditized the category, and you have solved the consumer's number one pain point.
So it is through a combination of that kind of approach that we believe that we can continue to hold a strong market share in DC and in semi-automatic. I think if you try to play the game that, that is everybody is playing, then whoever has got the most, you know, deepest pocket is going to win. But as you know very well, that is not the only way to win. So our focus is on creating those points of difference, de-commoditizing these categories. That doesn't mean that we are gonna, you know, just let go of, you know, low-priced categories. We've never done that.
We need to fight where we need to fight tactically, but the strategic fight will always be on de-commoditizing these categories and getting value for these categories, for the industry, for our shareholders, and for the consumers as well, whether it's DC or whether it's SA. I think DC and SA, one thing we must remember, penetration growth has been very low for these two categories in the last five years. Once penetration growth comes back to DC and SA, which is your guess or mine as to how far away it is, the absolute volumes here are quite mind-boggling. So I don't think DC is going to go away anytime soon, or SA. We continue to stand by these categories, but we will look to de-commoditize these categories, as I mentioned.
Sure. And so my third question, you know, in some of the cost items that we, you know, compare Whirlpool to, say, some of the other larger peers, right? Say, for example, freight cost, right? We see that, you know, there is significant room for improvement. So, just your take in terms of, you know, maybe adding another plant in south or in some other part of the country to optimize some of these freight costs or some of these other cost items. And, I mean, sorry for harping on it again, but just the kind of cash flows that you generate, I'm sure it'll be easy for you to, you know, take those calls to improve the P&L significantly.
Oh, thank you. Freight cost. Sorry, I didn't understand what you were saying. So I'm just going to give a bit of color, and then Aditya is going to jump in. So when we compare freight costs, it's very interesting because one analyst, I think about one year ago, had told us this point, that your freight costs are higher. So we obviously went into a deep dive on it, because anywhere where there is money, we want to, we want to be there. Here are the facts: the freight cost of anybody who sells a lot of refrigerators will always be much higher than anybody who sells a lot of air conditioners. And the freight cost of anybody who sells a lot of air conditioners will be higher than anybody who sells a lot of smartphones.
When you look at the freight cost, it's quite important to look at the product mix of the company as well. What I mean by that is, if I'm selling 50%-55% refrigerators, 25% washing machines, and 15% ACs, my freight cost will be X, Y, and Z for each of those categories, right? Weighted. Somebody else who has a completely different freight mix, for example, they're selling 80% washing machines and 20% air conditioners, their freight cost per will be much lower than mine per unit, right? And if somebody is selling 100% refrigerators, his freight cost will be way more than mine. So we have benchmarked our freight costs versus the entire industry. We do not believe that we are sitting on any competitive disadvantage.
Whether we are at an advantage or not, I will not say, but it is our mix compared to some of these other brands that you're referring to, that is causing the change. Aditya, any points on this?
I think you've said it all. You've said it all. The only additional perspective I would add is, when you're looking at freight costs, you're looking at the percentage of revenue. So while the incurrence of the freight is more volumetric in terms of how many number of units you can carry into a truck, while the truck freight remains same, but higher the number of units you carry, and hence the freight. And hence, when you compare, a refrigerators versus washers to air conditioners, in air conditioners, you can carry more number of units for the same freight, but the per unit value of AC is significantly higher, let's say. So that causes, freight as a percentage of revenue to be significantly lower for air conditioner compared to a refrigerators and washers.
Now, when you extend the same logic to televisions, for example, again, the number of units which goes in the same truck will be even higher, and hence, the per unit freight will be lower, and the value per unit of a television will be even higher than, the value per unit of a refrigerator or even an air con. And hence, on a percentage basis, that will be even significantly lower, and the same thing is then applicable for mobiles as well. So when you look at from a percentage revenue point of view on that logic, and adjust for the product mix of different companies, you can start looking at, that freight as a percentage of revenues is much more comparable than what is reflected in the reported results because of these differences.
I hope I answered your question. Yeah, it's basically the mix.
Yes, sir.
If I started selling twice the number of air conditioners tomorrow, keeping everything else the same, my freight cost as a percentage of NR will come down. You will start seeing if I sell the same mix as company X or company Y, you will see that my costs are at least as good, if not better than theirs.
Fair enough. Sir, you know, you mentioned about this year being the worst in terms of, I mean, it being challenging in terms of profitability. So is it fair to say that, you know, we are going to see no margin expansion or very limited margin expansion in the coming financial year?
No, I don't know that. The reason I don't know that, sir, is because I don't know what will happen to pricing in the market, firstly, right? If the pricing goes up by 1%, 2%, 3%, 4%, the numbers are completely different, as you can imagine, right? 4%, of course, let's not dream, but I'm just saying that it's one big thing. The second is, while the costs are in, the regulatory costs are in for everybody, everybody is also working on how to reduce the regulatory costs going forward, right? By reengineering, et cetera. You need time to do that. You can only do that after you're finished the regulatory work. You keep on reengineering as you go forward, basically. All companies do that.
And, and of course, the third thing, like I said, is we don't know what mix is going to sell. Let us say the premium mix starts selling much better in 2026, 2027. If the premium mix starts selling much better, then you have a mix help that comes through, which helps you in your margin, gross margin, right? We don't know. We can't predict these things sitting here at this point in time. We can have assumptions, but every time we've made assumptions, not only us, everybody in the industry, a lot depends on the monsoon, a lot depends on how much the sun shines in summer, believe it or not, and a lot depends on the other parts of the economy as well, right?
So we are very hopeful, very positive, given that we had a very tough, let's say, summer and a very early monsoon in 2025, 2026. Just hoping a little bit for the reverse, you know, if the summer lasted a bit longer and if the monsoons were very strong, but a little less, you know, let's say, erratic compared to last year, that would be really good. And then lastly, of course, you have the fourth variable, which is your cost programming, right? So our cost program people also have targets. They have stretch targets that are very difficult to get. But people, our people have surprised us in the last three years by getting to places we thought they couldn't get to, because they're so good at what they do.
And so therefore, given so many variables, pricing, regulatory, market, P4G, cost programs, it's difficult for me to say this will be the profit or that will be the profit. Directionally, it's an unusual year, that's all. I hope I answered your question.
Yes, sir. And sir, just one feedback. You know, now that, Whirlpool Corporation, you know, is not a majority shareholder, it would be great if we can have these calls, every quarter.
Yes, I do commit on this call that we will have the calls every quarter. Yes, so that's, that's a commitment.
Thank you so much and all the best.
Thank you, sir.
Thank you. We have the next question from the line of Natasha Jain from PhillipCapital. Please go ahead.
Yeah, thank you for the opportunity. So my question is on competitive dynamics. So two points here. First, we are seeing that Voltas, Beko, Godrej, Haier, and now even LG Essentials coming in very aggressively in all categories that Whirlpool is present. Additionally, in your largest revenue salience, which is refrigerator, first off, it's a highly penetrated product compared to other appliances, and secondly, for some reason, replacement cycle is just getting longer without any trigger for a customer to change, as in there's no frequent de-rating, like what comes in from your AC. So again, it's not a very quick demand generator category anymore. Given these two points, how do you read the competitive dynamics for industry and Whirlpool in particular?
... Thank you, ma'am, for that question. I think the competition that's there for us is exactly the same for everybody else. So just to be clear, there are, say, 10, 12 players competing in the market today. 10, 12, let's say, big name players, and then there's probably another 15, 20. My competitors, except for me, they'll be the same for others also, if you know what I mean. So we are all in a very competitive area, and I think the answer that I'm giving is probably true for everybody rather than just for us. It is very, very competitive, but that's where I think there are only two things that a company needs to do. One is: be clear on why your strategies will allow you to win in the marketplace.
If your strategies are the same as everybody else's, with no differentiation, and you're not clear on that, then sure, you have a risk of not winning in the marketplace. The second is: how good are you at executing your strategy? So everybody can have a strategy. It looks wonderful in PowerPoint. Everybody stands around, cheers the strategy. But can you execute? How detailed are you at running into the market and making things happen? That is where I think, you know, I would say that strategy, you could argue that we have a good strategy. I, I could tell you that I have a better strategy than my competition. Competition will tell you that I have a better strategy. You can't decide on this. We are very proud of our execution ability. We are very proud of how we work as one team.
And I think that probably is what we really hold to, because at the end, we only have two things with us, no? One is the brand name, and the second is our people. Other than this, we don't have anything else. Yes, we have money, but everybody else has money. So it's only the brand name and our people that make the difference in business for us. As far as refrigerators, which is a very technical point that you mentioned, two things. Firstly, I would say refrigerators is a big enough category, but like I told you before, if I talk of Whirlpool, I have significant opportunities to grow in washing machines, in the front load business, for example. Significant opportunities to grow.
My shares are very low, and what somebody else is to me in direct cool, I am to them in front load washing machines, right? Similarly, in air conditioners, same story. My share is very low, so I have plenty of opportunity to grow in those categories. Okay? On top, refrigerators is not a category that is super high penetrated. So just for your perspective, we are less than 36%-37% penetration in this country on refrigerators. Still, very frankly, we should be at least heading towards the next 20 years, towards the 65%-70% penetration. So for a variety of reasons, which we don't have the time to go into right now, I would, you know, probably at some other forum, I will share this. There are a lot of reasons why the refrigerators replacement cycle has not happened as per plan.
For the same reasons, they will start happening, in my view, in the next 1-5 years in a significant way. DC will pick up, and so will semiautomatic. The bottom half of India, in terms of income, is going to come back in a strong way. And when that happens, these will grow. And when these grow, your replacements will also start growing for other reasons. So, I mean, I would say that in my view, I can't get into the detail now. It will probably take 15 minutes for me to explain why, but I do see in the next 1-5 years, a pickup in durables happening, especially in refrigerators and washing machines.
Air conditioners, anyway, goes up or down, depending on the summer, and in typical, air conditioners grown well in the last five years. But refrigerators and washing machines, I think there is a significant pickup coming in the next 1-5 years, in my view. But that's just my view. It's not the view of the Whirlpool of India Limited. It's just based on my assessment of what's happening. So I would say that we have less, I mean, I don't have much to worry about. All we can do is have a clear strategy, understand what our points of differences are, outline them, make sure the entire organization is clear on that, and then go out and execute all the plans that we've agreed as close to perfection as possible.
I believe that any company that can do that consistently over a five-year period, will be still standing at the end of five years in a strong position. Companies that cannot, will have a difficult time.
Thank you, sir. That's helpful. The second question is on AC. I understand it's a very small category for you at this point, but if I observe the market share data, you have grown, versus probably the incumbents who've lost market share. Now, given that there's so much of cost hike coming in and GST benefits almost gone, in such a scenario, if I were to just pick up brands in the middle segment of the pyramid, so do you think that Whirlpool as a brand could be a bigger beneficiary, given you would be more favorably placed in terms of pricing versus the rest of the brands in that category? And, in terms of outlier, could AC become an outlier for you in the near term, given that now that will be a seasonal quarter for AC?
Thank you for that question, ma'am, and very astute observations. On AC, I would say we are quite interested in this category. As I said very clearly right at the beginning, we wanted to make sure we get our refrigerator and washing machine ducks in a row first, before we start worrying about AC. We got our refrigerator and washing machine ducks, relatively speaking, in a row, and then we started focusing on AC. It is working for us, and we will continue to drive that business. You are right that we will have some advantages as we go into the market, and we intend to fully leverage those advantages. Having a better mix across categories also de-risks you from a long-term point of view. So we are. Are we interested in AC? Of course, we're interested in AC. Are we going to do crazy stuff?
No, we are not going to. We will always keep to the path of financial sensibility while doing things. And so that will be our mantra. But, I mean, you can be naughty once in a while. That is allowed, I think.
Fair enough, sir. Thank you so much, and all the best.
Thank you, ma'am.
Thank you. Ladies and gentlemen, in the interest of time, that was the last question. I would now like to hand the conference over to Miss Sweta Srivastava for closing comments.
Thank you, everyone, for joining the call. With that, I would like to draw this call to close. Thank you.
Thank you. Thank you.
Thank you. On behalf of Whirlpool of India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.