Time period given by analyst is one year when Orient Electric Ltd. price can reach defined target.
Orient Electric Ltd., incorporated in the year 2016, is a Mid Cap company (having a market cap of Rs 7279.02 Crore) operating in Consumer Durables sector.
Orient Electric Ltd. key Products/Revenue Segments include Electrical Equipment, Scrap, Export Incentives and Sale of services for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-09-2021, the company reported a Standalone Total Income of Rs 595.72 Crore, up 40.76 % from last quarter Total Income of Rs 423.22 Crore and up 37.10 % from last year same quarter Total Income of Rs 434.51 Crore. Company reported net profit after tax of Rs 34.77 Crore in latest quarter.
Investment Rationale
Orient Electric reported strong revenue and EBITDA growth, a beat on estimates. Revenue grew 37%, with two-year CAGR at 17% vs. Crompton and Havells CAGRs of 13% and 20%. ECD segment grew 38%, with two-year CAGR at 22% vs. Crompton/Havells CAGRs of 18/22%. Leading players are sustaining strong growth in ECD. Orient’s ECD growth was mainly driven by the premium, economy and portable fans segments while water heaters (+50% YoY) and small appliances saw pent-up demand. The lighting segment too saw a robust topline recovery, growing 35% YoY, with two-year CAGR at 7% vs. Crompton/Havells CAGRs of 0/18%. The growth in lighting was driven by B-C; however, B-B private business enquiries have increased. Orient also delivered an EBITDA margin of 10.4% (HSIE 9.4%, higher than consensus), a 290bps contraction vs. expectation of a 396bps contraction. EBITDA grew by 7% YoY, with two-year CAGR at 68% vs. Crompton/Havells CAGRs of 29/37%. The brokerage expects the ECD growth momentum and lighting margin expansion to sustain, going forward. The brokerage maintains estimates and value Orient Electric at 38x P/E on FY24E EPS to derive a TP of INR 400.
Promoter/FII Holdings
Promoters held 38.52 per cent stake in the company as of 30-Sep-2021, while FIIs owned 8.74 per cent, DIIs 23.78 per cent.
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