Arihant Capital's research report on Orient Electric
Orient Electric (OEL) has reported robust performance during Q3FY21 with a strong beat led by ECD segment. Revenue for the quarter grew by 25% YoY/43% QoQ to INR 618 cr vs our estimates of INR 572 cr. EBITDA for the quarter increased sharply by 86% YoY/46% QoQ to INR 84 cr. Despite a contraction in gross margin, EBITDA margin for the quarter expanded by 448bps YoY/30bps QoQ due to cost optimization. Other expenses for the quarter fell by 29% YoY and employee cost went down by 9% YoY. Profit for the quarter increased sharply by 2.7x YoY at INR 52 cr as against our estimate of INR 35 cr. Overall B2C business recorded steep growth during the quarter while institutional buying remained subdued owing to slower projects execution and capex spending.
Outlook
We maintain our Buy rating on the stock with a revised TP of INR 335 based on 46x FY23E P/E (our initiation level TP was INR 269).
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