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Systematix Research Report
Orient Electric Ltd.’s Q4 FY22 result was a mixed bag. Revenue dipped 6% YoY, and Ebitda margin (up 91 basis points QoQ to 10.7%) saw sequential recovery.
While price hikes impacted electrical consumer durables revenue (down 11% YoY), the lighting and switchgear segment continued to do well with 15% YoY rise in revenue, and 125 bps YoY and 99 bps QoQ margin expansion.
Migration to direct-to-consumer distribution (from master distribution) in underpenetrated markets (such as Odisha, Bihar etc.) is expected to drive Orient Electric's growth, while pricing action, premiumisation and operating leverage should aid margins.
We thus estimate 12%/19% compound annual growth rate revenue/profit after tax over FY22-24E, with healthy return on equity (~25%) and free cash flows.
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