Orient Electric Q2 FY27 Results (NSE: ORIENTELEC)
Signal: Margin expansion
The read
The trajectory remains positive on revenue and operating profit: Q2FY27 revenue grew 25.1% YoY and EBITDA margin expanded 106bps to 6.46% because employee cost rose only 10.1% and depreciation 0.8%, but the second consecutive quarter of gross-margin compression to 29.0% as raw-material intensity reached 29.9% is the key sustainability test.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹879.34 Cr | +25.1% | -7.4% |
| EBIT | ₹37.53 Cr | +99.3% | |
| Net profit | ₹27.06 Cr | +124.4% | |
| EPS | ₹1.27 | +122.8% | |
| EBIT margin | 6.46% |
P&L walk
Revenue rose 25.1% YoY to ₹879.34 Cr, but gross margin compressed 253bps to 29.0% as raw-material intensity increased to 29.9%; EBITDA nevertheless grew 49.7% to ₹56.79 Cr and margin expanded 106bps to 6.46% through fixed-cost absorption, lifting PAT 124.4% to ₹27.06 Cr.
Segments
Electrical Consumer Durables remained the larger and faster-profit-growing unit, with ₹550.50 Cr revenue (+24.9% YoY) and ₹52.24 Cr segment result (+43.9%), while Lighting & Switchgear delivered ₹328.84 Cr revenue (+25.7%) and ₹40.84 Cr result (+19.5%).
Key positives
- Revenue reached ₹879.34 Cr, up 25.1% YoY, with Electrical Consumer Durables and Lighting & Switchgear both growing around 25% YoY.
- Derived EBITDA grew 49.7% versus revenue growth of 25.1%, a 24.6pp gap, while employee cost rose 10.1% and depreciation 0.8%; EBITDA margin expanded 106bps to 6.46%.
- PAT increased 124.4% YoY to ₹27.06 Cr, with EPS growth of 122.8% broadly tracking PAT growth.
- Electrical Consumer Durables segment result rose 43.9% YoY to ₹52.24 Cr, materially faster than its 24.9% revenue growth.
Key concerns
- Gross margin compressed 253bps YoY to 29.0% as raw-material cost rose to 29.9% of revenue from 23.6%; this is the second consecutive quarter of compression in the available results series.
- Inventory increased ₹92.12 Cr in H1FY27 and operating cash flow was only ₹7.78 Cr despite H1FY27 profit before tax of ₹78.93 Cr, indicating working-capital absorption.
- Q2 revenue declined 7.4% sequentially and EBITDA margin fell 54bps from the preceding quarter's 7.0%.
Research and educational content only. Not investment advice.