Driving growth with consistent execution
We hosted Orient Electric management represented by Mr. Ravindra Singh Negi, MD and CEO, and Mr. Arvind Vats, CFO, for a non-deal roadshow in Mumbai. Orient is repositioning itself from a fan‑led franchise to a full‑wall electrical brand through a three-stage strategy, with wires and switchgears (stage 1) and switches and lighting (stage 2) representing the key whitespace opportunities for expansion and topline growth, while fans and appliances (stage 3) continue to serve as the core pillars for brand equity, premiumization, and margin accretion. Orient aims to scale revenues to more than INR 50bn by FY29E by growing in mid-teens. While management noted that commodity inflation remains elevated, it believes the current cost pressures are not sustainable. Despite cost inflation, management remains confident of driving sustained margin improvement and is targeting a transition toward double‑digit EBITDA margins over the coming years. Management further indicated that, with the festive season approaching, improving consumer sentiment and the normalization of channel inventory, the company expects demand to pick up. The lighting segment continues to deliver healthy performance despite industry‑wide price deflation. Volume growth has remained strong over the past two years, supported by sustained premiumization. We believe the company is well‑positioned to continue gaining share, which combined with improving mix and operating leverage, should aid steady margin expansion. With the stock having halved over the past five years, valuations now appear compelling. We model 12/15/20% revenue/EBITDA/APAT CAGRs over FY26–29E, underpinned by improving profitability and consistent growth across categories. We maintain BUY, with a unchanged target price of INR 225/sh, valuing the stock at 28x Sep‑28E EPS. Orient Electric is a top pick in the sector.
