Nippon India Mutual Fund raises stake in Whirlpool of India. Details here

In a significant move that underscores renewed confidence in the Indian consumer durables sector, Nippon India Mutual Fund has increased its stake in Whirlpool of India, a leading player in the home appliances market. The development signals institutional support for Whirlpool's growth prospects amid a competitive and evolving business landscape.

Details of the Stake Increase

According to stock exchange filings, Nippon India Mutual Fund acquired an additional 0.39% stake in Whirlpool of India, taking its total holding to 5.08% as of July 2025. The latest purchase was made through open market transactions, reflecting the fund house’s growing conviction in the company’s long-term fundamentals.

The increased stake crosses the critical 5% threshold, which mandates disclosure under SEBI regulations, highlighting the institutional nature and importance of the transaction.

Why Whirlpool of India? Understanding the Rationale

Whirlpool of India, a subsidiary of the US-based Whirlpool Corporation, has been a trusted name in India’s home appliances sector for decades. The company manufactures and markets refrigerators, washing machines, air conditioners, and kitchen appliances. Despite a sluggish demand in recent quarters, analysts believe the company is well-placed to capitalize on rural market penetration, product innovation, and increasing disposable incomes.

"Whirlpool has a strong brand presence and product reliability, which are valuable assets in a consumption-driven economy like India," said Kavita Chugh, FMCG and Consumer Durables Analyst at Axis Securities. “Nippon India’s increased stake reflects confidence in the long-term recovery of domestic demand, particularly in Tier-2 and Tier-3 cities.”

Market Context: A Revival in Consumer Durables?

The Indian consumer durables sector faced headwinds in FY2024 due to rising inflation, weather-related disruptions, and high inventory levels. However, the narrative is shifting in FY2025.

The arrival of a normal monsoon, moderation in inflation, and a steady uptick in urban demand have started to reflect in improved channel sales. The recent festive season also brought early signs of volume growth recovery, especially in large appliances like refrigerators and washing machines.

Moreover, with the government’s push on rural electrification and housing, demand is expected to remain resilient.

"We’re seeing a broad-based recovery across white goods, and companies with strong rural distribution networks stand to benefit the most," noted Rakesh Kumar, Senior Equity Strategist at Motilal Oswal Financial Services. “In that context, Whirlpool’s brand equity and Nippon India’s timing seem quite synergistic.”

Stock Performance and Financial Overview

Whirlpool of India shares closed at ₹1,400 on the NSE on Thursday, marking a modest year-to-date gain of 2.5%. The stock has been range-bound in recent months, primarily due to weak quarterly earnings and margin pressures. However, it continues to enjoy a healthy valuation relative to peers, given its brand strength and low debt levels.

For the quarter ended March 2025, the company reported:

• Revenue: ₹1,710 crore (up 6.2% YoY)

• Net Profit: ₹85 crore (down 11% YoY)

• EBITDA Margin: 8.4% (impacted by promotional expenses and raw material costs)

Despite these short-term hiccups, the management has maintained a cautiously optimistic stance.

In its last earnings call, Whirlpool’s CEO Arun Bhatia stated, “We are prioritizing innovation and channel efficiency. Our long-term strategy is aligned with consumer aspirations and sustainability goals.”

Institutional Confidence and Broader Implications

Nippon India Mutual Fund’s decision to increase exposure is likely to bolster investor sentiment, especially at a time when FIIs (Foreign Institutional Investors) have remained net sellers in the sector. Institutional investors typically seek long-term alpha and are known to accumulate stocks during periods of consolidation.

Other mutual funds such as SBI MF, HDFC MF, and ICICI Prudential also hold minor positions in Whirlpool, but Nippon’s latest move makes it one of the top institutional shareholders.

"Institutional buying usually precedes broader interest, especially from retail and HNI investors," said Manoj Tiwari, Head of Research at Marwadi Financial Services. "We expect Whirlpool to attract more attention if Q2 results confirm margin recovery."

Investor Outlook: Accumulate on Dips?

While the consumer durables sector is yet to see a full-blown recovery, analysts recommend a selective approach. Whirlpool of India fits the bill for investors looking for quality blue-chip exposure in a cyclical recovery phase.

Brokerages currently have a mixed-to-positive view on the stock:

• ICICI Direct: Hold with target price ₹1,500

• Kotak Institutional Equities: Accumulate with medium-term view

• Axis Securities: Buy on dips, with potential upside of 12-15% over the next 6-9 months

The stock’s underperformance compared to peers like Voltas and Havells may also create room for re-rating if operating metrics improve.

Nippon India Mutual Fund’s increased stake in Whirlpool of India sends a strong signal of institutional belief in the company's growth potential. While short-term headwinds remain, the broader outlook for the consumer durables sector appears constructive.

As the economy strengthens and consumer sentiment rebounds, Whirlpool may be poised for a gradual but solid comeback—backed by strategic capital, brand equity, and a loyal customer base.