Hi @Surender

I am not updated on whirlpool from more than 02 years now since i exited my position completely in late 2021. I will still try to explain my evolving understanding regarding this sector over last few years.

First of all, the 02 most important traits which are required for sustainable weath creation for a very long period of time (decades) are megatrends and leadership (explained very beautifully by Mr Utpal Sheth of RaRe enterprises). Consumption is one of the biggest megatrend in india and it will remain so for foreseeable future because India is such an under penetrated market and now growing one of the fastest in the world (combination of low base and very high growth makes consumption in India one of the megatrend). You can also call it a sector with long term tailwinds or a sector where Total Addressable Market is very large and growing. Whirlpool ticked this box for me back in 2020.

Story is very simple as of now. Now it comes down to the second trait which is to find out companies which exhibit leadership qualities among these megatrend sectors and themes. These factors are also simple to analyse by asking basic fundamental questions like

1. Does company has high market share and is compamy gaining market share from peers? (growing faster than the industry)

2. Company margins are volatile or stable over long periods of time across cycles (commodity element or brand).

3. Are return ratio like ROE, ROCE significantly high and no reduction in ROCE after deploying incremental capital in the same business? (This will tell us if growth is coming by going down in value chain or by going up, basically capital allocation strategy of the company).

4. How are margins comparable to peers? (May not necessarily be high but better than peers. Amazon and APL apollo have created great businesses even if margins are quite low because of better efficiency and inventory turns. So, return ratio remains high)

5. Are company products susceptible to technology change? If yes than what is the attitude of company towards R&D and keep developing thier own products for better.

6. Does company has a very strong moat (either supply side or demand side or both).

The answers to most of these questions in case of Whirlpool were not very positive. Hence the exit (obviously i realised this over a period of time after giving sufficiently longer rope and did not act on a very short term performance).

Now coming to third part of my understanding. Consumption remains a megatrend but finding companies which exihibit leadeship qualities is the key. There will be many sub sectors among consumption where no company will exibit such qualities. Few industries and sectors are just gruesome and difficult businesses. Consumer durables like refrigerstor, washing machine and air conditioners may be simply selling like commodities. Reasons can be multiple like excessive competition, no product differentiation other than cost etc but leave those reason for some other day, that will be beyond the scope of this write up. Available data point towards commodity nature of business among these products.

Coming towards last part. Understanding of profit pools is important. We have to understand that in any particular industry, there will be multiple entities responsible for bringing a product from factory to end user. Somebody may be supplying a critical part, somebody may control the distribution and the supply chain (e-commerce companies), somebody may own the the customer (platform companies). These are just few examples. We have to understand who is making the highest margins or who get to keep the highest amount among this entire value chain.

Disclosure: No holding. exited long time back. Found better opportunities in retail like Aditya Vision, Redtape and Senco gold.

The big problem with Symphony has been Margin Compression.
This has happened because of inability of company pass on rise in costs, due to severe competition in domestic market.
Also growth has stagnated in international markets.

The only hope of light is recovery in volume growth in domestic market, with margins stabilizing. Also, recovery of demand in US Markets, will definitely help as this market has highest margins, which will reflect in March Quarter.

Allcargo logistics is planning to restructure further by separating the ECU business and merging the supplychain and contract logistics business including Gati. This is expected to be completed by Jan 25.

Allcargo restructuring.pdf (1.2 MB)

Thank you so much for bringing out the difference between process and outcome clearly. This same warren buffet approach is applied by Peter lynch too, where he used to invest in 1000 of stocks and those who do well , will remain in the portfolio. Its like in earlier periods, when new born deaths were more likely, people used to give birth to as many children as possible and then out of 15-20 children, may be 5-6 would survive, just like a portfolio.

On similar lines recently i curated a list of roughly 40 stocks out of Nifty 50, Nifty next 50, Midcap 150 and small cap 250 indices, so rougly 10% invest-worthy stocks, out of top 500 stocks on the basis of some well known criteria like non-psu, non-cyclical, no or very less debt, high promoter holding, high ROCE, high sales growth, profit growth etc. I would be thinking on same process-driven line, where I will be investing in these 40-45 companies and if they survive, they will become concentrated holdings of my portfolio in future and those who die natural death, they will go out of portfolio.