The Orient Electric stock had a great start in 2021 with a 33 percent gain so far. Motilal Oswal is positive on the stock. They have initiated coverage with a Rs 350 target. Rakesh Khanna, Managing Director and CEO of Orient Electric shared his views on the same.

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“Market has been behaving fairly positive for some time. Q3FY21 was good not only for us but for the entire industry and the FMCG sector has been doing well. Partly because of pent-up demand, partly because people have been staying more home,” he said.

He sees fairly strong demand continuing till now.

“To some extent, it will be a part of pent-up demand and to some extent, it will be a part of the change of behavior,” he mentioned.

“There has been leverage because of the revenue growth so while the cost remains the same, revenue goes up. There has been a lot of good opportunities to introspect and look at where we can all improve efficiencies. The pandemic has taught us how to work efficiently. Because of the material cost going up, there will be pressure on the margins that we may see in the times to come,” he stated.

“There is a huge potential to grow in lighting as a category. Cooler is gaining traction. Water heaters – there is a change of behavior and the adoption of water heater is going up. The kitchen appliances are doing very well. All the categories that we are in, have a good potential,” he said.

In terms of ad spends, he pointed out, “As we continue to grow, you will see more of ad spends coming in the categories.”

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(Edited by : Anshul)

First Published:Mar 16, 2021 5:29 PM IST