Orient Electric's topline grew 9.4% YoY to Rs 8.6 billion, led by good growth in Lighting and Switchgears (up 12.5% YoY; better than peers like Havells: +1.5%) and high-double digit volume growth along with ~200bps market share gains in B2C lighting. Expansion of distributor partnerships and new product launches supported growth. Despite a soft start to Q4, fans exhibited high-single digit growth with summer-led channel filling starting in Mar-25.
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Orient Electric Ltd.'s topline was in line with estimates and PAT below our estimates due to higher depreciation in the Hyderabad plant. The topline grew 9.4% on account of better performance in the L&S segment.
Fans witnessed high single-digit growth with muted start to the quarter; BLDC grew over 50% YoY, Air coolers saw robust growth (over 30% YoY) with preseason build-up in both online and offline channel.
Revenue contribution from direct-to-market states saw double-digit growth. New products – focused on premium SKUs – contributed >20% to fan sales. BLDC contributed ~20% to Ceiling Fans. Following the ramp-up, Hyderabad facility is now catering to about 50% of TPW production resulting in enhanced manufacturing efficiency.
We continue to like the DTM strategy as well as the good growth and visibility from other regions. We also like the continuous effort in the Lighting segment with respect to greater SKUs and consistent increase in the B2B Lighting space.
We maintain Buy with a target price of Rs 287. This implies a P/E of 33x on FY27E EPS and it is at a ~48% discount to the five-year historical average P/E multiple on a 1-yr forward basis. The significant discount is on account of frequent senior management changes.
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