Orient Electric Q1 FY27 Results (NSE: ORIENTELEC)
Signal: Margin expansion
The read
Revenue grew 23.5% YoY to ₹950 Cr, EBITDA margin expanded 102bps to 7.0% despite 277bps gross margin compression, driven by operating leverage (employee cost +10.7%, other expenses +3.0% vs revenue +23.5%) and Sanchay cost savings; PAT up 79.7% YoY to ₹31.5 Cr, aided by operating leverage and higher other income. Exceptional loss of ₹4 Cr on plant consolidation is a one-off restructuring cost.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹949.8 Cr | 23.5% | 0.2% |
| EBIT | ₹47.8 Cr | 79.7% | |
| Net profit | ₹31.5 Cr | 79.7% | |
| EPS | ₹1.48 | 79.7% | |
| EBIT margin | 7.0% |
P&L walk
Revenue grew 23.5% YoY; gross margin compressed 277bps YoY as COGS outpaced revenue; EBITDA margin expanded 102bps YoY due to operating leverage (employee cost +10.7%, other expenses +3.0% vs revenue +23.5%) and Sanchay cost savings; PAT up 79.7% YoY, aided by operating leverage and higher other income; exceptional loss of ₹4 Cr on plant consolidation.
Segments
Both segments delivered strong YoY growth: ECD +22.7% (revenue ₹669 Cr) and Lighting & Switchgear +25.4% (revenue ₹281 Cr); ECD EBIT margin improved 190bps to 8.7% (EBIT ₹58 Cr) while Lighting margin contracted 240bps to 15.0% (EBIT ₹42 Cr) but absolute EBIT rose.
Key positives
- Revenue grew 23.5% YoY to ₹950 Cr, broad-based across segments.
- EBITDA margin expanded 102bps YoY to 7.0% despite gross margin compression.
- Operating leverage: employee cost (+10.7%) and other expenses (+3.0%) grew far slower than revenue.
- PAT up 79.7% YoY to ₹31.5 Cr, EPS tracks.
- Net cash position of ₹133 Cr and working capital of 25 days reflect strong financial health.
- ECD segment EBIT margin improved 190bps YoY to 8.7%.
Key concerns
- Gross margin compressed 277bps YoY to 29.8% as COGS grew 28.6% vs revenue 23.5%.
- Exceptional loss of ₹4 Cr on consolidation of manufacturing facilities (write-down of assets).
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