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ICICI Securities Report
Orient Electric Ltd. had commenced transition to direct to market distribution to reduce dependence on wholesale and super distribution in FY22. We note there are visible benefits of this strategy with 60% revenue growth YoY in states where shift to DTM is complete.
Orient Electric's e-commerce channel also performed well with four times revenue growth YoY, albeit on a smaller base. We note Orient Electric brand equity has developed strong brand equity and has also introduced multiple differentiated products.
With steady investments to strengthen width and depth of distribution, it will likely be able to gain market share and improve margin in medium term.
We remain positive on Orient Electric and model it to report revenue and profit after tax compound annual growth rates of 13.7% and 15.6% over FY22-FY25E.
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