Orient Electric (ORIENTELEC)
StalwartFairStock Score: 29/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹187.31 |
| Market Cap | ₹3,997.01 Cr |
| P/E Ratio | 36.37 |
| ROCE | 17.89% |
| ROE | 13.35% |
| Dividend Yield | 0.8% |
| Profit Growth | 79.74% |
| Debt/Equity | 0.12 |
| Sales Growth | 23.66% |
| Promoter Holding | 38.31% |
| 52-Week Range | ₹149.05 — ₹217.51 |
| Sector | Consumer Durables |
| Book Value | ₹35.62 |
Strengths
- Low leverage with Debt/Equity of 0.17 provides financial stability.
- ROCE of 17.89% and ROE of 13.35% show efficient capital use.
- Sales growth of 10.97% and profit growth of 16.38% indicate positive momentum.
- Piotroski F-Score of 7/9 points to sound balance-sheet and operational health.
- Latest quarter delivered ₹906 Cr sales and ₹26 Cr net profit, keeping the company profitable.
Concerns
- P/E of 42.72 and P/B of 5.89 leave no margin of safety.
- PEG of 3.12 suggests the current growth rate does not justify the valuation.
- Latest quarter net margin is only about 2.9%, leaving the business exposed to input-cost and competitive pressures.
- Dividend yield of 0.81% and FairStock Score of 18/100 reinforce the unfavorable risk-reward balance.
AI Analysis
Let me assess Orient Electric the way I would assess any purchase: what kind of business am I buying, and what am I paying? The business side is not bad. Debt is low, with D/E at 0.17, and the company earns a ROCE of 17.89% and an ROE of 13.35%. Sales have grown by 10.97% and profit by 16.38%, and the Piotroski score of 7/9 suggests sound financial mechanics. But valuation is where this deal fails. At ₹187.60, the P/E is 42.72, nearly 43 times earnings. Book value is only ₹31.86, so I am paying 5.89 times book for a business whose latest quarter delivered only ₹26 Cr net profit on ₹906 Cr sales—a margin of about 2.9%. That is thin, and the growth, while positive, gives me no cushion: the PEG ratio of 3.12 means I am overpaying for each unit of future growth. Dividend yield of 0.81% is negligible, and the FairStock Score of 18/100 rightly flags risk. Promoter holding of 38.31% is not compelling either. A high multiple requires perfect execution; appliances is competitive and margin-fragile. The margin of safety is absent. Benjamin Graham taught me to buy with a cushion, and this price offers none. I can admire the balance sheet and the double-digit profit growth, but I cannot pay 43 times earnings for it. I would keep this on my watchlist and wait for a better price, or for proof that margins and returns can rise significantly. No matter how good the business, price still matters.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer