Orient Electric Limited is a piece of the Hugely Diversified Indian Conglomerate CK Birla Group. It is one of the dominant players in consumer electrical brands in India selling fans, lighting, home machines, and switch gears. It was once in the past a division of the Orient Paper and Industries (BSE: 502420), which itself is an auxiliary of the $1.8 billion CK Birla Group.

The organization made its official debut on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on 14 May 2018.

Orient Electric Limited has producing offices in Kolkata, Faridabad, Noida, and Guwahati. It is the biggest maker and exporter of fans from India with a strong foothold in more than 35 universal markets.

Orient Electric Limited (OEL) is one of the sister companies of Indian Corporate House CK Birla Group. A recognized name in the Indian fan industry for over 60 years, Orient Electric has today settled itself in the market as a one-stop brand for the way of life electrical arrangements which incorporate Fans, Lighting, Home Appliances, and Switchgears.

Orient Electric Limited, formerly a division of Orient Paper and Industries Limited (OPIL), was fused as Orient Paper Mills Ltd. in 1939. The CK Birla Group began Orient Paper with only one paper machine at Brajrajnagar in Orissa, India.

Orient Fans, the past Calcutta Electrical Manufacturing Company, turned into a piece of the CK Birla Group in 1954 and was in this way renamed into Orient Electric in 2014.

Orient Electric created and protected the progressive PSPO (Peak Speed Performance Output) innovation in the mid-’90s which changed the business viewpoint by and large. So as to improve the creation, meet the ever-changing necessities of the clients, and set up itself as a worldwide market pioneer, Orient Electric likewise prepared its assembling plants at Faridabad in Haryana and Kolkata in the territory of West Bengal with cutting edge hardware and innovation.

Utilizing its solid image personality created throughout the years, Orient Electric forayed into another scope of electrical items. It began exchanging of CFLs (compact fluorescent) and FTLs (fluorescent tube) in the year 2007. In 2008, the organization set up a propelled producing unit at Faridabad in the territory of Haryana devoted to assembling of CFLs and FTLs.It later wandered into LED lighting arrangements in 2014 and starting today, it is one of the main lighting organizations in India with a different LED-driven portfolio.

Orient Electric wandered into the home machines advertise in 2011 with a wide scope of items including Air Coolers, Water Heaters, Juicer Mixer Grinders, Mixer Grinders, Toasters, Electric Kettles, Coolers, Induction Cookers, Rice Cookers and Electric Irons. Orient Electric’s Home Appliances division today appreciates a container India nearness with a solid conveyance organize.

The organization changed its image name and character from ‘Orient Electricals’ to ‘Orient Electric’ and united its business verticals of Fans, Lighting, and Home Appliances. The brand patch up was finished with a plan to set up the organization’s way of life as a one-stop home arrangements supplier with the cutting edge clients who settle on educated purchasing choices. As a major aspect of the brand repositioning plan, the organization additionally propelled another bound together correspondences crusade ‘Change to brilliant’ and its new logo in the dynamic shading ‘orange’. The year likewise denoted the dispatch of BLDC fans and Orient Electric’s entrance into LED lighting arrangements.

Proceeding with its endeavors to situate itself as one-stop arrangement supplier of the way of life electrical arrangements, Orient Electric forayed into the Switchgear showcase. Orient Electric’s savvy scope of vitality proficient LV Switchgear items incorporates MCB (Miniature Circuit Breakers), RCCB (Residual Current Circuit Breakers), Isolators, and Distribution Boards. The organization fabricates the Switchgear run at its best in class producing office situated at Noida in the territory of Uttar Pradesh.

Orient Electric turned into the principal Indian lighting brand in 2016 to have been granted 3-Star rating by BEE for its LED lights which fills in as a declaration to the organization’s intentional promise to creating imaginative, stylishly satisfying, and mechanically propelled lighting items. As a feature of its progressing endeavors in making greater commitment focuses to improve purchaser experience, Orient Electric opened its first selective Smart Shop in Karnal, Haryana which offers customers a chance to see, contact and purchase the Orient’s whole scope of items under one rooftop.

On fourteenth May 2018, Orient Electric Limited got recorded on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Orient Electric Ltd. stock exchanges under the code “541301” on BSE and under the code “ORIENTELEC” on NSE.

Orient Electric gets demerged from Orient Paper and Industries Limited (OPIL) into a different recorded element, Orient Electric Limited (OEL). The Scheme of demerger was affirmed by the Kolkata Bench of the National Company Law Tribunal on November 9, 2017.

Orient Electric works with a way of thinking to cut out a specialty in the worldwide fan industry and advance into a headway of life home arrangements supplier. With tasks spreading over more than 35 nations, Orient Electric has earned the trust of a large number of clients by giving front line way of life electrical items. Orient Electric is the biggest maker and exporter of fans in India with over 60% sales to overseas exports to international markets.

Orient Electric invests wholeheartedly in its Research & Development capacities, the soul of constant development, and responsibility to fabricate forefront way of life electrical items that address the issues and desires for new-age shoppers. It has completely coordinated assembling offices situated in Kolkata, Faridabad, Noida, and Guwahati.

It is the biggest maker and exporter of fans from India with a commanding nearness in more than 40 universal markets. It is likewise the second-biggest producer of LED bulbs in India and the primary Indian lighting brand to have been granted BEE star rating for LED bulbs. In the local market, it has efficient dissemination arrange driven by more than 4000 vendors, 1,25,000 retail outlets, and a solid help organize covering 450 urban areas.

C K Birla Group firm Orient Electric Ltd on Tuesday said the exceptional coronavirus lockdown won’t just affect the Jan-March quarter however the impact will be found in the resulting three-month time span also.

The organization, which had revealed a twofold digit development pattern till February of this monetary, is normal the consequences of FY 2020 “discouraged”, OEL said in an administrative documenting.

“Considering the obstacle brought about by Covid-19, the Q4FY20 business execution of the organization will get unfavorably affected,” the organization said.

“In spite of the fact that the twofold digit development pattern proceeded until February 2020, in any case, the unfavorable effect of March will keep the exhibition result discouraged for the quarter finishing March 2020 and subsequently pull down the yearly outcomes for FY 2020 from the revealed run rate until December 2020,” it included.

As indicated by the organization, “The business interruptions emerging from Covid-19 are relied upon to proceed all through Q1FY21 too, if not more”.

“This won’t just affect OEL antagonistically for the pinnacle season yet additionally influence the business everywhere,” it said.

Orient Electric Limited, a piece of the $2.4 billion CK Birla gathering, has Telangana on its radar for setting up a South India centered fan producing office. Arrange, which makes fans in Kolkata and Faridabad, said it is truly seeing setting up a plant down South as a feature of its emphasis on this all-season showcase.

Orient Electric, some portion of the CK Birla Group, is hoping to reinforce its machines business by enhancing into more up to date geologies, uniting its essence in existing markets, and growing its retail impression.

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The apparatuses division incorporates items, for example, air coolers, water warmers, and littler machines like blender processor and iron. The fragment presently adds to around 20 percent of the organization’s all-out turnover which remained at around 2000-3000 crore as of March 2020.

As indicated by Saurabh Baisakhia, Senior Vice-President and Business Head, Appliances, Orient as of now holds 7-8 percent share noticeable all around the cooler market. Plans are brewing to support it to 12 percent before the finish of FY20.

The air cooler market in India, which incorporates composed and disorderly players, is evaluated to be near 7-8 million units in volume terms and around ₹2,500-3,000 crore regarding esteem. The portion of sorted out fragment remains at around 40 percent.

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“The air cooler industry has been developing at a CAGR of 10-15 percent throughout the previous three years. For us, the development has been near 35 percent and we hope to keep up this development even as our base has been expanding,” Baisakhi told in a media interview.

Expanding Footprint

A majority of the demand for air cooler comes from the north and central India. However, the company has been witnessing a steady rise in demand from other markets as well. Accordingly, it is looking to expand its presence in Andhra Pradesh, Telangana, Tamil Nadu, Odisha, and Gujarat among others.

The company is also looking to expand its retail footprint to 10,000 outlets — up from the current level of 8,000 outlets.

“The focus is not just on expansion but also on strengthening our footprint in existing markets. We would ideally aim for a 20-25 percent share in the air coolers market moving forward,” he said. The company has earmarked around ₹25-30 crore towards marketing and advertising.

Orient has come up with a new range to suit varied aesthetic preferences and usage environments and has launched a range of IoT-enabled coolers.

Small appliances

Air coolers contribute to 50 percent of the revenues of appliances division, while 30 percent comes from the water heater and the remaining (20 percent) from small appliances.

The company recently entered into a strategic partnership with Italy’s De’Longhi Group thereby bagging exclusive rights to market and sell three international premium small appliances brands in India — De’Longhi, Kenwood, and Braun.

Business Model

OEL has an annual fan manufacturing capacity of 98.5 lakh units, lights & luminaires capacity of 255 lakh units, and switchgear
capacity of 25.5 lakh units situated in Haryana & West Bengal. The company is also engaged in trading of home appliances
products (i.e. air coolers, water heaters, mixer grinders, etc).

Strategic Positioning

OEL is the second-largest fan player in India. In a short span of time, the company has become one of the top 3 manufacturers
of LED bulbs in India. It is the fifth-largest player in the air cooler segment in India. This apart, the company has a small with rising
presence in home appliances and switchgear segment.

Competitive Edge

OEL has a strong distribution network in North and South India. The company has maintained its solid position in the fan
segment since long due to its strong focus on R&D. The company has an edge over its competitors in the fan & light segment
due to the high proportion of manufactured sales. The company also has a good brand recall as the former Indian captain Mr. M. S. Dhoni is the brand ambassador of the company since 2006.

Financial Structure

OPIL has a strong balance sheet position, with net debt/EBITDA at 1.17x in FY18. The company also has a comfortable liquidity position due to the projected CFO of INR 95 crore vis-à-vis debt repayment obligation of INR 20 crore in FY20.
Key Competitors OEL’s key competitors are Crompton, Havells, Bajaj Electricals, Usha, Luminous, V-Guard, Philips Lighting, Surya Roshni, Syska LED, Symphony, TTK Prestige, etc.

Industry Revenue Drivers Rise in disposable income, rapid urbanization, real estate activity and government focus on the electrification program are the key revenue drivers in this industry.

Shareholder Value Proposition

We are recommending our followers and investors to accumulate the stock around 200 and Target Price of INR 1000 per share, offering 5 times upside potential to investors with a time span of holding a of minimum 5 years.

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Our targets are based on 35x FY21E EPS, which is at a 20% discount to 4-year industry average multiple as it generates lower than industry average operating margin. We believe the valuation discount to industry average can narrow down in case of better than-projected improvement in operating margin in the near future.