(Reuters) – India’s Orient Electric reported a 43% fall in second-quarter profit on Friday, hurt by surging expenses and a bleak demand for fans and coolers during the monsoon season.
Orient Electric, which sells fans, coolers and water heaters, said profit fell to 104.4 million rupees ($1.2 million) in the quarter ended Sept. 30 from 184.5 million rupees an year ago.
Its revenue from operations grew 16% to 6.60 billion rupees, while total expenses grew 15%.
For further earnings highlights, click
KEY CONTEXT
The September quarter is typically the weakest seasonally, as demand dwindles following months of hot summer, said analysts. A weak consumer sentiment, driven by inflationary pressures, further hindered demand, they added.
Costs of key raw materials copper and aluminum also rose on a year-on-year basis, hurting margins.
Rivals Polycab India and Havells India missed their Q2 profit estimates on lower demand amid higher expenses, while Crompton Greaves has yet to report its quarterly results.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBI Price/S Revenue Profit Mean # of Stock to Div
TDA ales growth (%) growth (%) rating* analyst price yield
s target** (%)
Orient Electric 34.52 17.77 1.45 12.66 41.84 Buy 14 0.77 0.70
Havells India 60.59 41.18 4.85 15.90 23.78 Hold 23 0.89 0.52
Crompton Greaves 38.46 25.36 2.67 12.79 29.23 Buy 32 0.81 0.76
Consumer Electricals
Polycab India 44.52 30.87 4.31 19.69 18.02 Buy 26 0.87 0.46
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell * Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 84.0750 rupees
(Reporting by Ashna Teresa Britto in Bengaluru; Editing by Sumana Nandy)
