Orient Electric Ltd (ORIENTELEC) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to Orient Electric Limited Q2 and FY '27 earnings conference call, hosted by DAM Capital Advisors. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Tanay Shah from DAM Capital Advisors. Thank you, and over to you, Tanay.
Tanay Shah (DAM Capital Advisors): Thank you, Danish. Good afternoon, and welcome to the Orient Electric Q2 FY '27 earnings call. Today, we have with us, Mr. Ravindra Singh Negi, Managing Director and CEO, Mr. Arvind Vats, CFO, and Mr. Sambhav Jain, Head, Investor Relations. Now without any further delay, I will hand over the call to the management for opening remarks, post which we will begin the Q&A session. Thank you, and over to you, sir.
Ravindra Singh Negi (Orient Electric Ltd): Thank you, Tanay. Good evening, ladies and gentlemen. Welcome to Orient Electric's conference call to discuss the results for the quarter ended 30th September, 2026. Thank you for joining us today. I trust you've had an
Ravindra Singh Negi (Orient Electric Ltd): to review our financial results and earnings presentation. Let me begin by briefly touching upon the broader operating environment, before taking you through our performance for the quarter, and the key developments across our businesses. During the quarter, we continue to face persistent commodity inflation, particularly in copper and aluminium. Crude related movements, added further pressure on raw material cost, and in turn, on our gross margins. At the same time, global and geopolitical uncertainties continued to affect supply chain visibility, and business planning. To mitigate these pressures, we've taken price increase of 3 to 6% across various categories in quarter two, and another increase of approximately 3% in October, in some of the categories, and complemented them with improved product mix and productivity initiatives. While input cost inflation has yet not been fully offset, we remain disciplined in our approach, balancing pricing with market competitiveness and sourcing efficiency. Against this backdrop, Orient Electric deliv- delivered broad-based growth with revenues increasing 25.2% year-on-year during the quarter. Our One Orient and Three Folds strategy continue to anchor our growth agenda, as we build Lighting, Wires, Switches and Switchgear alongside our established core Fans and Appliances businesses. Premiumization and innovation, along with portfolio diversification, remained key priorities, enabling us to leverage our existing ecosystem more effectively, while keeping consumer needs and disciplined execution at the centre of our strategy. Let me start with our Lighting and Switchgear business, which delivered a strong performance during the quarter, with revenues growing 25.7% year-on-year to 329 crores. Within Lighting, Consumer Lighting delivered double-digit growth, supported by continued traction in premium products. High-value looms remained consistent at 66% of the loom mix, reflecting our continued focus on premiumization and a richer product portfolio. Professional Lighting also delivered high single-digit gr- growth, supported by a strong enquiry pipeline, and a continued focus on new product development. We also are encouraged by the momentum across our other categories. Wires more than doubled year-on-year, while Switchgear and Switches delivered high double-digit growth. Our Electrician Engagement Programs, along with distribution synergies across categories are helping us deepen channel reach, and capitalise cross-selling opportunities. We continue to focus on quality, dependable service, and a relevant product portfolio to further strengthen retailer confidence. Moving now to our core strength of Electrical Consumer Durables business, ECD revenues stood at 550 crores, representing a year-on-year growth of 24.9%. Fans delivered a high double-digit growth, outperforming the industry and resulting in market share gains. The performance was broad-based with both our direct-to-market-led and master-distributor-led markets delivering double-digit growth. Within Fans, BLDC continued to see strong traction, growing approximately 26% year-on-year, supported by both premium and innovat- innovation-led launches. Premium products accounted for approximately 40% of the fan mix. Our focus on innovation and premiumization continues to yield the, encouraging results, with new products contributing more than 30% of the fans revenue during the quarter. Energy efficient products, differentiated design, and consumer relevant innovation remained central to our product strategy. Appliances also delivered double-digit growth, led by Water Heaters and Garment Care segments. As we move into the festive season and the second half of the year, our focus remains on ensuring the right product assortment and availability across channels, while maintaining a measured approach to the broader demand environment. On the distribution front, we continue to scale our direct-to-market model, with further expansion across Madhya Pradesh, Chhattisgarh and Jharkhand, strengthening our go-to-market execution. We also took over the service for Punjab and Nagpur region. Our digital channel also maintained healthy momentum, with e-commerce growing by high double-digit, strengthening our presence across marketplaces. Quick commerce now contribute approximately 15% of our digital revenue, and grew by almost 100% year-on-year, reflecting the evolving consumer buying line-
Ravindra Singh Negi (Orient Electric Ltd): On the brand front, we continue to strengthen visibility across airports, outdoor, and digital media, with a focus on engaging premium audiences and reinforcing our technology-led positioning. We are also strengthening the consumer experience with a deeper, even deeper through Project Samvaad, our customer service enhancement initiative, which is helping us sharpen consumer insights and enable faster resolution through AI-led capabilities. Turning to the financial performance, overall, the revenue grew 25.2% year-on-year to 879 crores during the quarter. Gross margins stood at 29%, impacted by continued input cost pressures during the quarter. Despite this, EBITDA grew 49.7% year-on-year to 57 crores, with EBITDA margin expanding by 106 basis points to 6.5%, supported by operating leverage and continued cost optimization. For H1, we've grown by 24.3%, with a revenue of rupees 1829 crores. Gross margins stood at 29.4% for H1, while EBITDA grew by 46.9% year-on-year. EBITDA margins stood at 6.7% for H1, which expanded by 104 basis points, supported by operating leverage across. Our cost optimization program, Project Sanchay, continued to deliver results, generating savings of approximately 13 crores during the quarter and approximately 23 crores for H1 through focused cost initiatives. PAT more than doubled to 27 crores during the quarter and 59 crores for H1, again close to 100% growth. We closed the quarter with working capital of 34 days. Cash discipline remains a key priority as we balance investments in our portfolio and the continued expansion of our distribution footprint. Over the long term, trending towards a double-digit EBITDA margin remains our aspiration, supported by mix improvement, productivity, and sustained cost optimization. Looking ahead, our focus remains on premiumization, innovation, expanding distribution, and strengthening consumer engagement while maintaining disciplined investments across the businesses. As we move through the festive season and the second half, we remain confident in our outlook, given the brand preference, market share gains, and a refreshed consumer-centric innovative portfolio of products across all three stages of the wall. On behalf of the entire Orient Electric family, I would like to wish all of you and your loved ones a very happy Diwali and a joyous festive season ahead. Thank you. We're now open for questions.
Moderator: All right. Thank you so much, sir. Ladies and gentlemen, we will now begin with a question-and-answer session. Anyone who wishes to ask a question may press star and one on their 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'll wait for a moment while the question queue assembles. Our first question comes from the line of Aniruddha Joshi with ICICI Securities. Please go ahead.
Aniruddha Joshi (ICICI Securities): Yeah, thanks for the opportunity, and congrats team for a great set of numbers in Q2. Sir, two questions from my side. I guess we have taken price hikes in October. So has that led to any inventory upstocking in September month or September quarter per se? Or is there any one-off performance in the growth which would have led either inventory upstocking or any low base or something like that? So that is question number one. And question number two, how do you see the BLDC fans business shaping up? Because now, I guess, with another rating change and again next rating change in Jan '25, there will be far more focus on BLDC fans. So how is BLDC fans as percent of our total sales, and what will be the plans on driving BLDC sales also? Yeah, that's it from my side. Thanks.
Ravindra Singh Negi (Orient Electric Ltd): Thank you, Aniruddha. I'll take your questions both. First is on the price hike, and if you look
Ravindra Singh Negi (Orient Electric Ltd): From April onwards, there've been very consistent price hikes that we've taken. None of these price hikes, typically when you would, you know if I were to go back couple of years back, each price hike would have a primary upstocking that will happen. So today, the trade is also kind of now, I would say, literally tired of price hikes, but it is not leading to any abnormal primary upstocking that happens. It's been consistent with a demand and a pull that we've been able to see. And one of the big things that we've seen across most of our categories is that response to our new products. For fans, we spoke about 30% revenue coming from the new product. All of our products, as we do a very close tracking of commercialization of these products across categories, I would say the success rate is 90% plus for us. And that is what is giving us market share gains and you know, helping us gain volume, value. On the base and everything, while, you know, industry had a lower base, we still had a slightly better growth versus industry last year Q2 also. If anything, from a season upstocking last year, the Diwali was slightly up, last year September had a little bit of upstocking. This year if anything, it's split between September and October. So there is no abnormal one-off that we see. On your second question on the BLDC growth, we've been seeing consistent growths for last eight quarters in BLDC. This quarter, we had 26% growth on BLDC. Almost 30% of our ceiling fan now comes on the BLDC portfolio. And it has happened over a period of understanding closely what a consumer wants from a tech perspective, from a design perspective, solving for those, converting those insights into new products, and ensuring that the core of the BLDC, which is the PCB, the quality is much, much better than what a consumer experiences across the industry and peers. So we're very confident on our portfolio, our quality, and the tech, as well as the design language that the consumers are getting. So BL BLDC will continue to grow. While we are 30% of the ceiling fan, industry by and large, if we take some of the larger BLDC out, would be in the range of about 17-18% of the ceiling fan. So, we continue to drive this in a big way. Trust that answers, Anirudh.
Aniruddha Joshi (ICICI Securities): Yeah, sure sir, this is very helpful. And congrats once again to the team for solid performance. Thank you.
Ravindra Singh Negi (Orient Electric Ltd): Thank you, Anirudh.
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