Mehabe score: 6 G Factor: 5 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 7.
Description
Orient Electric is one of the leading consumer electrical brands in India with a diverse portfolio of fans, lighting, home appliances and switch-gears. The company takes pride in its R&D capabilities, spirit of continuous innovation and commitment to manufacturing cutting-edge lifestyle electrical products that meet the needs and expectations of modern consumers.
Main Points
Electric Consumer Durables Segment (72% of revenues)
The company manufactures a range of products like fans, air coolers, water heaters, kitchen appliances, etc. under this segment. #
It’s fan business is the oldest within the company and accounts for 60% of the total sales & 83% sales of the segment. It is the second largest fan manufacturer in the country with a 20% market share in the organized market. It is also the largest exporter of fans from India.Site:ORIENTELECMain Symbol:ORIENTELEC
Stock trades at 317.0, above its 50dma 302.09. It also trades above its 200dma 264.4. The stock remains bullish on techicals
The 52 week high is at 345.00 and the 52week low is at 171.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 26.23%
– has been maintaining a healthy dividend payout of 32.37%
Weakness
– Stock is trading at 14.75 times its book value
Competition
– The industry trades at a mean P/E of 47.3x. Whirlpool India trades at the industry’s max P/E of 86.25x. ORIENTELEC trades at a P/E of 56.1x
– Industry’s mean G-Factor is 4.7 while the mean Piotski score is 9.0. ORIENTELEC has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is -0.5%. The max 1- month return was given by TTK Prestige: a return of 5.87 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 802.0 cr compared to Rs 563.0 cr for period ended Mar 2020, a rise of 42.5%
Operating Profits reported at Rs 97.0 cr for period ended Mar 2021 vis-vis 65.0 for period ended Mar 2020 .
Operating Margins expanded 54.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.95 compared to Rs 2.45 for previous quarter ended Dec 2020 and Rs 1.69 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2033.0 cr for period ended Mar 2021 vis-vis sales of Rs 2062.0 cr for the period ended Mar 2020, a fall of 1.4%. The 3 year sales cagr stood at 8.3%.
Operating margins expanded to 11.0% for period ended Mar 2021 vis-vis 9.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 120.0 cr for period ended Mar 2021 vis-vis sales of Rs 79.0 cr for the period ended Mar 2020, rising 34.2%.
Company recorded a healthy Net Profit CAGR of 23.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 427.0 cr for period ended Mar 2021 vis-vis Rs 129.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 64% on a 1 Year basis vis-vis a return of 38% over the last 3 Years. – The compounded sales growth on a TTM bassis is -1% vis-vis a compounded sales growth of 8% over the last 3 Years. – The compounded profit growth on a TTM basis is 52% vis-vis a compounded profit growth of 22% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 9.23% vis-vis 7.53% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 29.68% vis-vis 30.93% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 26.23%
– has been maintaining a healthy dividend payout of 32.37% – Stock is trading at 14.75 times its book value
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 302.09 and is trading at 317.0, thus bullish price action wise.
