Orient Electric expects input price normalisation to help margins stabilise
Orient Electric posted its Q1FY22 results with second wave of COVID-19 impacting peak summer season. The company’s working capital rose too. Rakesh Khanna, MD and CEO discussed the earnings fine print and outlook for rest of FY22.
Orient Electric posted its Q1FY22 results with second wave of COVID-19 impacting peak summer season. The company’s working capital rose too. Rakesh Khanna, MD and CEO discussed the earnings fine print and outlook for rest of FY22.
From June onwards the company has seen demand picking up again. “Given the kind of trend we are seeing now, we are very optimistic that going this year we should be able to deliver very good results compared to the last year,” he said.
Khanna is optimistic about seeing margin improvement in the coming months.
“We are seeing some kind of stability in the commodity cost and therefore margins should start coming to the pre-pandemic level. The normal trend says that the commodity cost will come down if not stabilise to the earlier levels, at that time one can see a significant improvement,” he shared.
In terms of commodity price increases, he mentioned, “The commodity cost increase was very sudden and very sharp. That restricted our ability to pass on this to the consumer quickly. Normally the costs are passed on to the market. However, as an industry we have taken good increases, we will be seeing margin improvements from this quarter onwards,” he mentioned.
“The total price increase would be I the range of 12-18 percent depending on which particular product we are talking about and what that could translate to is that we should be back to the kind of margins that we were earlier on,” he stated.
For the full interview, watch the accompanying video.
(Edited by : Abhishek Jha)
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