Whirlpool Corp CEO cites higher valuation behind India stake sale, says "not leaving the country"

Whirlpool Corporation CEO Marc Bitzer said that the company is not leaving India and they remain bullish on the country and the business growth prospects here for the long term.

"We are not leaving India, we believe in India long term," Bitzer said in an interaction with CNBC on Monday.

He also spoke about the company's decision to sell a 24% stake in the India entity via block deals, consequently bringing their stake down to 51%. "We took our share down to 51% in India," he said. Bitzer termed the stake sale to be an "asset arbitrage" as the India unit trades at a higher multiple compared to the global parent.

"When you have a business trading at 50 times multiple when your own company trades a lot lower, it's an asset arbitrage. That's what it is. But we believe in the long-term future growth of India," Bitzer said.

CNBC-TV18 had reported last week that Whirlpool of India is trading at a financial year 2025 price-to-earnings multiple of 43 times, compared to its global parent, which trades at a multiple of 7 times.

Whirlpool Mauritius sold a 24% stake via block deals last week, in which SBI Mutual Fund emerged as the largest buyer, picking up a 7.2% stake. India's Mutual Funds have been steadily increasing their stake in Whirlpool of India, despite the stock's underperformance over the last four years and elevated valuations despite struggling financials.

Bitzer also mentioned that a portfolio transformation is a multi-year process and that the company is currently at a "critical milestone" courtesy of the transfer of its European business into a joint venture company in Turkey, which is awaiting approval from the UK regulators.

The CEO said that Whirlpool will be a very different company post the portfolio transformation with a different margin and cash flow profile. He spoke about replacement demand not being an issue as 60% of the company's demand in 2023 came from the replacement market. Bitzer attributed the sluggishness on the discretionary side to the underperformance, which has remained soft owing to the increase in mortgage rates.

Shares of Whirlpool Corp ended 3% lower overnight, while those of the India unit fell 1% on Monday.