Orient Electric -
Q1 FY 26 results and concall highlights -
Q1 outcomes -
Revenues - 769 vs 754 cr, up 2 pc
Gross Profits - 250 vs 250 cr ( GMs @ 32.6 vs 33.1 pc, down 56 bps )
EBITDA - 46 vs 40 cr, up 15 pc ( due lower other expenses )
PAT - 17.6 vs 14.4 cr, up 21 pc
WC days @ 25
Net Cash on books @ 72 cr
Segmental performance -
Electrical consumer durables ( ECD ) revenues @ 545 vs 545 cr, flat YoY ( water heaters saw high double digit growth. Early rains led to industry wide disruption in sales of cooling products )
Lighting and Switchgear revenues @ 224 vs 210 cr, up 7 pc YoY ( Switchgears, Wires saw high double digit growth. Lighting performance aided by greater share of higher value / premium product sales )
B2C lighting volumes grew in double digits ( with single digit value growth due price erosions )
Coolers business saw a de-growth of 40 pc - due weak summers + heavy rains - this was the primary reason for a weak performance in company’s ECD division
In next 7-8 Qtrs, company aspires to reach 10 pc EBITDA margins ( if this happens, can significantly boost profitability )
ROHS compliance has kicked in India in the LED lighting segment wef 01 Apr 25. Company hopes, this should bring about some discipline in the LED lighting space
Company’s share of premium range in the Fans business is around 30 pc ( industry avg is around 20 pc ). Aim to take it to 40 pc in next 2 yrs
Company estimates that coolers inventory @ the end of Q1 should be at higher than normal levels across most parts of the country due weak summers
Company intends to keep spending 4-5 pc on advertising and marketing spends going forward ( in Q1 they spent 5.5 pc but the season turned out to be weak )
Festive season in 2025 is about 2 weeks earlier vs 2024. Therefore, Q2 should see descent build up in inventories ahead of festive season
The EBIT margins in ECD division saw a sharp contraction from 9.1 pc to 6.8 pc. Primary reason for the same the the operating de-leverage that the company witnessed due weak summers
Company’s new Hyderabad facility shall ensure that capex requirements for next 2-3 yrs shall be minimal. As their Hyderabad facility ramps up, it should also help ramp up their EBITDA margins
Disc: hold a small tracking position, looking for signs of uptick in the Industry, not SEBI registered, not a buy/sell recommendation