Why Whirlpool India Shares Have Hit Record High

Whirlpool of India shares jumped as much as 19.3 per cent to a 52-week high on good volumes. The outperformance in the stock supported the consumer durables sub-index on the BSE, which rose 1.5 per cent beating the broader Sensex and Nifty. Whirlpool makes refrigerators, washing machines, air conditioners and small home appliances. (Track stock)

Here are the reasons for the sharp gain in Whirlpool,

1) The company told analysts on Wednesday that it aims to grow revenue by nearly 2.5 times in next three years. The guidance implies compounded annual growth rate of 35 per cent over FY14-FY17. Whirlpool's revenue stood at Rs 2,834 crore in FY14. "Company is targeting higher market share, aggressive product launches in coming few years," an analyst who attended the meet says.

2) Expectations of a rate cut have risen because of further cooling in consumer prices. Retail inflation, which the Reserve Bank of India tracks in setting lending rates, slowed to 5.52 per cent in October from a multi-year low of 6.46 per cent a month earlier, according to data released on Wednesday. Cooling prices will intensify pressure on the RBI to cut interest rates to stimulate consumer demand which powers 60 per cent of the economy.

3) Lower rates will increase demand for consumer goods and companies like Whirlpool will benefit. Consumer durables production fell 11.3 per cent in September even though industrial activity rose at its fastest pace in three months. Barring May, consumer durables segment has not expanded in the current fiscal year.

4) Whirlpool shares have rallied sharply since the company reported second quarter numbers on October 31. The company reported over two-fold increase in net profit at Rs. 41 crore on account of higher sales. Its sales in festive period grew 20 per cent. (Read full story here)

5) Whirlpool's parent released its third-quarter 2014 earnings last month and its shares hit a 52-week high of $177.18 yesterday.

Whirpool of India shares ended 14.55 per cent higher at Rs 610.40 apiece, outperforming the the broader Sensex which ended 0.24 per cent lower at 27,940. (Track stock)

(With inputs from agencies)