India's Orient Electric reports Q2 profit slump as expenses bite

Orient Electric

25/10/2024 10:52

Oct 25 (Reuters) - India's Orient Electric  ONTE.NS  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  urn:newsml:reuters.com:*:nFWN3M10Q2
    
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  POLC.NS  and Havells India  HVEL.NS  missed their Q2 profit estimates on lower demand amid higher
expenses, while Crompton Greaves  CROP.NS  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        ONTE.NS    34.52  17.77    1.45      12.66       41.84       Buy      14         0.77        0.70
     Havells India         HVEL.NS    60.59  41.18    4.85      15.90       23.78      Hold      23         0.89        0.52
    Crompton Greaves       CROP.NS    38.46  25.36    2.67      12.79       29.23       Buy      32         0.81        0.76
 Consumer Electricals                                                                                                 
     Polycab India         POLC.NS    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

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Orient Electric Q2    https://tmsnrt.rs/3Ae8mPE
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 (Reporting by Ashna Teresa Britto in Bengaluru; Editing by Sumana Nandy)
 ((AshnaTeresa.Britto@thomsonreuters.com;))