Revenue during the quarter increased by 37% YoY to Rs 594.38 crore. Entry level products and all consumer-facing channels were the top runners. Premium products recorded an upsurge in demand in the quarter. Export markets have also opened up with new orders. Tender business remained quite sluggish.

Profit before tax in Q2 FY22 stood at Rs 46.55 crore, up by 7.5% from Rs 43.30 crore in Q2 FY21.

Orient Electric said that home consumption products continued to experience the demand through all the channels. However, end-September encountered slowdown across geographies.

Besides, cost pressures induced by hardening of metal and plastics prices and shortage of ICs posed headwinds to maintain profitability throughout the quarter.

Price increases were taken in-quarter to counter the rising input costs. Aggressive cost reduction drives were undertaken across the organisation. Sensing an optimistic outlook, the manufacturing and procurement activities were maintained at normal levels during the quarter to ensure readiness of supplies and part-mitigate the commodity cost pressures.

Gross margins have improved sequentially by 120 bps over previous quarter with a combined effect of price increase, mix improvements and cost reduction. However, it shrunk 4.8% below last year on an exceptionally higher base due to low-cost inventories carried during H1 last year followed by steep increase in commodity rates over past one year.

Effective working capital as on 30 September 2021 has increased by 14 days from last year levels. This was due to planned built-up of Inventory over past 2 quarters, to ensure readiness across all channels and exports for servicing future pent up demand and in anticipation of any supply disruption arising due to Wave-3. This is expected to reduce gradually over the remaining months of the year.

As a result of the working capital increase, the net cash position has reduced. It is likely to improve in second half with the reduction of working capital, the company said.

Orient Electric, belonging to the CK Birla group, operates under two segments - electrical consumer durable (includes ceiling fans, portable and airflow along with components and accessories thereof and appliances- coolers, geysers and home appliances, etc.) and lighting & switchgear (includes lights & luminaries-LED, street lights, switches, MCB etc).

The scrip fell 2.08% to currently trade at Rs 317.45 on the BSE.