Onida Electronics Ltd (ONIDA) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Concept Investor Relations): Ladies and gentlemen, good day and welcome to the conference call of Onida Electronics Limited, arranged by Concept Investor Relations, to discuss its Q2 and H1 FY '27 results. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which would cause actual results to differ from those anticipated. Such statements are made on management's beliefs as well as assumptions made by the information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review. Let me now introduce you to the management. We have with us today, Mr. Gunjan Srivastava, Managing Director and CEO, Mr. Manish Desai, Chief Financial Officer. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gunjan Srivastava, Managing Director and CEO. Thank you, and over to you, Mr. Srivastava.
Gunjan Srivastava (Onida Electronics Ltd): Thank you, and good afternoon, everyone. Welcome to Onida Electronics' Q2 and H1 financial year '27 earnings call. We are at an exciting stage in Onida's journey, building on the legacy of a brand that Indian households have trusted for over four decades. Earlier this year, we began the next phase of our transformation through Onida REWIRED. This strategic initiative aims to reshape the brand and make it more relevant to today's consumers. It is guided by four key pillars: affordable premiumization, innovation-led product development,
Gunjan Srivastava (Onida Electronics Ltd): superior customer experience and sustainable profitable growth. For our customers, this means being closer to them and serving them better. We are in the process of expanding our distribution network and we have taken several initiatives towards this. We held Onida Rewired Dealer Meets across regions, engaging both existing and new channel partners. To take the brand beyond urban markets, we have entered also in an exclusive tie-up with a rural distribution partner. During this period, we also launched our Onida Smart Hub exclusive brand outlets. Four of these outlets are now operational, and we are working to expand this network further. These outlets strengthen our own retail presence and improve our market penetration in tier 2 and 3 markets. Through these efforts, we aim to deepen our presence in markets where the Onida brand has historically enjoyed strong recall. On the product front, we're building a more aspirational product portfolio focused on larger, smarter, and feature-rich offerings, and we are shortening our development cycles to bring new products to market faster. In televisions, we launched our flagship 100-inch QD-Mini LED television, which strengthens our premium large-screen range. In air conditioners, we have just finalized our range for the upcoming season, and in washing machines, we are revamping our portfolio to meet evolv- evolving consumer needs. I'm pleased to share that these initiatives are already showing results. In Q2 this financial year, our air conditioner business grew 239% year-on-year. Our LED TV business grew 52% year-on-year, and according to sellout data, Onida air conditioners gained market share in the e-commerce channel for the month of September 2026. Across channels, our e-commerce business grew 169% year-on-year, led by air conditioners and washing machines. On the product cost front, input cost rose sharply during the first six months of the financial year: copper, aluminium, steel, plastics, and memory chips, all became more expensive. Brands across the industry took multiple rounds of price increases. However, competitive intensity limited offset of the input cost, so margins remained under pressure across the sector. In televisions, higher panel and other components led to steep price increases in the entry segment, which weighed on offtake. The premium and large-screen segment continued to see demand. Premiumization remains a key structural driver for the industry. Consumers are moving towards higher capacity washing machines, larger televisions, and energy-efficient air conditioners supported by consumer financing. The transition to the new BEE energy efficiency norms in air conditioners is largely complete. Channel partners have built up inventory ahead of the festive season, which shows confidence in the demand outlook. Over the long term, the penetration of air conditioners and washing machines in India remains low, giving the industry a strong runway for growth in the years ahead. Moving on to the financial highlights for Q2 and H1 FY26-27: in Q2, brand business revenue grew 65% year-on-year to Rs. 150.4 crores and business margin was 17.7%, an increase of 470 basis points over previous year, keeping aside one-offs. In Q2, total revenue from operations stood at Rs. 198.6 crores, a growth of 22% year-on-year. For the first half, H1 FY27, brand business revenue grew 48% year-on-year to Rs. 325.7 crores and business margin was 17.8% compared with 15% in the same period last year, setting aside one-off in Q2. Total revenue from operations stood at Rs. 381.1 crores, a growth of 25% year-on-year. As we enter the second half of the year, we are optimistic about festive demand. Early consumer sentiment has been encouraging, and our refreshed product range, wider distribution reach, and growing presence on e-commerce leave us well-placed to make the most of the season. At the same time, we remain cautious on input costs. The situation in West Asia is still unresolved and continues to push up commodity and component prices across the industry. We're watching these developments closely. To protect our margins, we'll rely on calibrated pricing, cost optimization, and a better product mix. With that, we would now be very happy to take your questions.
Moderator (Concept Investor Relations): Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Aditya with Jhaver Investments. Please go ahead.
Aditya (Jhaver Investments): Yeah. Thanks for the opportunity. Congratulations Gunjan on delivering strong growth number year on year for Q2. I have specific questions related to one is on service center expansion, you alluded that it is very important for us to expand service center. Can you also share who is leading this vertical because it is core to our transformation journey? And how many are operational today? And what is our target for Q4 and by end of next year? Can you quantify with numbers as well?
Gunjan Srivastava (Onida Electronics Ltd): Thanks, Aditya. Thank you for the question. So first of all, from a leadership perspective for customer service, which as you rightly pointed out is a very key driver of our transformation journey, we have a new leader in customer service by the name of Mr. Ganesh. He joined us about a couple of months ago, and he's essentially leading this improvement and transformation process. As regards your question about how many service centers we have, I 425. That's the number which we have currently. And in the next 3 to 4 months leading up to this financial year, we would be essentially consolidating, because as we already highlighted, we've more or less reached where we wanted to be from a distribution and service expansion as far as this financial year is concerned, and we now want to consolidate our productivity from this reach.
Aditya (Jhaver Investments): And okay, for this year we are good, you are saying. Okay. And on the distribution also, you alluded that we have to expand from 4,000 outlet to 8,000 outlet. So all these things are also done for till Q4 or what are the targets for next year?
Gunjan Srivastava (Onida Electronics Ltd): So it is in the process. We've largely achieved what we wanted to for the year, but still there is a a little bit to go. I've already indicated, I think in the presentation slides, the number of expansion we've had in terms of new distributors and new dealers. We will definitely have new targets when we enter into the next financial year, because our overall reach expansion number is much more than what we wanted to achieve this year.
Aditya (Jhaver Investments): So for this year, at what point we did we reach, 4,000 or 6,000? What is the number for distribution outlet?
Gunjan Srivastava (Onida Electronics Ltd): So we've added 57 distributors, Aditya, and 127 direct dealers. Each distributor would have added a number of sub-dealers, which is what ultimately end up towards our expanded reach. Don't have an exact number to share with you at this point in time, but we are fairly So we wanted to add 4,000 outlets. We would have added more than 50% of that in the first 6 months.
Aditya (Jhaver Investments): Okay, sounds good. And lastly, I have this question. Since this in this consumer space, each and every time we see a new brand or new start-up is trying to enter in this space. So given your experience with Philips and Bosch, what gives you the confidence that whatever the playbook we are trying, it will be sustainable turnaround for us? And what are the key execution milestone as investor also we should track while assessing Onida?
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