Orient Electric Ltd Management Discussions

Global Economic Overview

In CY 2025, the global economy registered a steady but modest growth of 3.4%, broadly in line with the previous year. Easing inflationary pressures, resilient labour markets, and a gradual recovery in global trade supported economic activity, however, growth remained below long term averages amid persistent geopolitical tensions, elevated trade policy uncertainty, and uneven regional economic performance.

Advanced economies recorded a growth of 1.9%, reflecting measured expansion under tight monetary conditions, while emerging market and developing economies (EMDEs) demonstrated relative resilience with a growth of 4.4%. The Euro Area continued to face subdued momentum due to weak manufacturing activity and policy uncertainty. Chinas growth moderated, impacted by property sector stress and weak domestic demand, with partial offsets from exports and new energy sector growth.

Global inflation declined to 4.1% in CY 2025 from 5.7% in CY 2024, reflecting improving price stability across major economies. Looking ahead, the global growth outlook remains moderate. The International Monetary Fund (IMF) projects global GDP growth of 3.1% in 2026 and 3.2% in 2027. While geopolitical developments, trade disruptions and softer external demand continue to pose risks, these are expected to be partially mitigated by easing monetary conditions and selective fiscal support. Overall, the global outlook remains stable but cautious, shaped by improving macroeconomic stability alongside lingering structural and geopolitical risks.

Indian Economic Overview

Indias macroeconomic fundamentals remained robust during FY 2025-26, supported by strong domestic demand, continued momentum in structural reforms, and a stable macroeconomic environment. Inflation remained largely benign through most of the year, while general government debt continued on a gradual downward trajectory, supporting macroeconomic stability and consumer confidence.

The Union Budget 2026–27 reaffirmed the Governments calibrated approach of balancing fiscal consolidation with growth support. Through the Finance Commission framework, resources shared with states, including tax devolution and grants, are budgeted at Rs. 16.56 lakh crore in the Budget Estimates for 2026–27, supporting state led infrastructure and urban development initiatives that further stimulate FMEG demand.

Continued prioritisation of public capital expenditure remains central to sustaining economic momentum and attracting private investment. These measures have positive downstream implications for consumption led sectors such as Fast Moving Electrical Goods (FMEG), supported by higher housing activity, urban infrastructure development, and increasing electrification intensity.

Indias emphasis on strengthening domestic manufacturing through initiatives such as Make in India and Production Linked Incentive (PLI) schemes is enhancing cost competitiveness, supply chain localisation, and resilience. These initiatives, aligned with the broader Viksit Bharat vision, are expected to support medium term growth, improve product affordability, and create favourable conditions for premiumisation across consumer electrical categories.

During the year, the operating environment also witnessed intermittent volatility arising from geopolitical developments. Geopolitical disturbances during the early part of the year, followed by heightened tensions towards the latter part of the year, led to temporary instability in global energy and commodity markets. These developments contributed to short term inflationary pressures across energy linked inputs, freight and select raw materials. While Indias underlying demand fundamentals and macroeconomic stability remained resilient, such external shocks underscored the importance of operational efficiency, cost discipline, and supply chain agility, particularly for manufacturing led sectors.

Industry Overview

Infrastructure Development

Infrastructure remains a critical enabler of Indias journey towards becoming a USD 5 trillion economy, with sustained public capital expenditure continuing to anchor the countrys long term growth strategy.

At the end of CY 2026, the

Manufacturing Purchasing Managers Index (PMI) — a key leading indicator of industrial and infrastructure activity remained strong at 56.9, reflecting healthy expansionary momentum. However, private sector investment exhibited signs of moderation during the period, marked by softer production expansion and cautious factory order inflows. This emerging hesitancy poses risks to infrastructure build out in segments where public capex alone may be insufficient, potentially impacting project pipelines across logistics, energy, and industrial capacity, should risk aversion persist.

Against this backdrop, the Union Budget for FY 2026–27 reiterates the Governments commitment to infrastructure led growth, with a renewed emphasis on strengthening domestic manufacturing, development of high value infrastructure, and targeted investments in Tier II and Tier III cities with populations exceeding 5 lakhs. These measures are expected to enhance regional industrialisation, deepen demand creation, and crowd in private investment over the medium term.

Indian Consumer Durables Sector

Currently, the fastest-growing major consumer durables market in the world, India is expected to become the fourth-largest by FY 2026-27.

The sector contributes 0.6% of Indias GDP. Aided by a steady rise in the demand for consumer durables, the market is projected to grow at 11% CAGR, touching Rs. 3 lakh crore by FY 2028-29. Higher disposable incomes, rapid technological innovation, and changing lifestyles are driving demand for consumer durables, triggering a notable expansion in Indias manufacturing capacity. Global brands are committing more seriously to the market, while Indian manufacturers are investing in product development and scale.

Favourable government policy and initiatives, aided by GST reforms, have provided strong tailwinds to the sector, which is undergoing a meaningful shift. If this trajectory holds, the country is on track to becoming a significant player in appliances and electronics by 2030 – not just as a consumption market, but as a manufacturing and innovation base.

Towards the end of the financial year, the consumer durables sector was impacted by a sharp escalation in global input cost volatility. Heightened geopolitical tensions during the fourth quarter led to increased prices across select raw materials, energy inputs and logistics, resulting in short term cost pressures for manufacturers. While underlying demand conditions remained stable, the increases contributed to a more challenging cost environment as the year closed.

Emerging Consumer Trends

Premiumisation

FY 2025-26 has been a defining year for premium home appliances in India. Rising disposable incomes, wider financing options, and evolving consumer expectations spanning aesthetics, build quality, brand credibility, and energy efficiency are driving a clear shift towards premiumisation.

Energy Efficiency and Sustainability

Revised BEE norms came into force on January 1, 2026, setting stricter energy benchmarks to reduce electricity consumption and advance Indias sustainability targets. Simultaneously, star ratcheting was made mandatory for a new set of appliances including televisions, LPG gas stoves, cooling towers, and chillers.

Transition towards Energy Efficient BLDC Technology

Indias electric fan market is shifting toward BLDC motor-based fans, driven by rising electricity costs and growing preference for energy efficient appliances. Unlike traditional fans consuming 70-80 watts, BLDC fans operate at just 30-40 watts, delivering meaningful energy savings. Government initiatives are accelerating this transition. The Bureau of Energy Efficiency has made star labelling mandatory for ceiling fans, with TPW fans expected to follow. This is prompting manufacturers to invest in advanced motor technologies, driving faster adoption of premium, energy-efficient products. The India Cooling Action Plan, launched by the Ministry of Environment, Forest and Climate Change, targets a 25-40% reduction in cooling energy demand by 2037–38 further strengthening the long-term case for BLDC fan adoption across the country.

E-commerce Growth

The rapid e-commerce growth in recent years has given a major boost to the electric consumer durables market by making products accessible to younger consumers and improving availability in Tier II and Tier III cities.

Quick commerce

It is fast emerging as a high-growth channel extending into select consumer electrical categories. Improved dark store penetration and expanded assortments are driving traction across products complementing e commerce and general trade channels.

Export opportunities

Indias positioning as an export base for consumer electricals continues to improve, supported by expanding manufacturing scale, quality compliance, and the global shift towards diversified sourcing under the China+1 framework. Demand is being driven by replacement cycles in developed markets and urbanisation led consumption in select emerging economies. At the same time, a dynamic geopolitical environment, evolving trade policies, and heightened focus on supply chain resilience are influencing global procurement decisions. Increasing regulatory requirements related to energy efficiency, safety, sustainability, and product compliance continue to favour manufacturers with strong quality systems, certification capabilities, and regulatory readiness, supporting a constructive medium-term outlook for exports from Indias consumer durables sector, notwithstanding periodic volatility in global demand conditions.

Smart Home Integration and IoT-Enabled Features

Indias smart and connected appliances market, valued at approximately USD 3.2 billion in

2025, is projected to grow to USD 6.2 billion by 2034, reflecting a CAGR of ~7.3%, driven by rising internet and smartphone penetration, rapid expansion of ecommerce, and sustained government investment in energy efficiency and digital infrastructure. Within this broader landscape, smart ceiling fans with IoT connectivity, app based controls, and voice assistant compatibility are witnessing increasing adoption, supported by Indias expanding smartphone user base and growing preference for connected home solutions. The expanding smart appliances ecosystem is expected to remain a key long term growth driver as consumers increasingly value connectivity, automation, and intelligent energy control.

Focus on Design and Aesthetics

With rising aspirational consumption, design and aesthetics have become critical differentiation levers. Consumers are increasingly willing to pay a premium for visually distinctive appliances that align with contemporary home interiors. Finish options, form factor innovation, and design coherence across product ranges are influencing brand preference, reinforcing the role of design led innovation in driving premium positioning.

Government Policies and Initiatives Supporting Industry and Economic Growth

The Government of India has implemented a broad set of policy initiatives aimed at strengthening the countrys manufacturing base, improving supply side capabilities, accelerating energy efficiency, and enhancing skill availability. Collectively, these measures are creating a supportive operating environment for manufacturing-led industries, including fast moving electrical goods and consumer durables.

Make in India

The Make in India programme has emerged as a key pillar of Indias manufacturing strategy amidst long standing capacity and competitiveness challenges. The initiative focussed on the development of industrial corridors, special economic zones, and industrial parks, while strengthening MSMEs, a sector that employs a significant share of Indias workforce. These measures have improved manufacturing infrastructure, encouraged domestic value addition, and enhanced Indias attractiveness as a production and sourcing base across multiple industrial segments.

Electronics Development Fund (EDF) Policy

The Electronics Development Fund Policy established the EDF as a Fund of Funds to promote domestic innovation and product development. The scheme channels capital into professionally managed Venture Capital and Angel Funds focussed on R&D led innovation, startups, and product development across electronics, IT, and nano electronics. By strengthening the innovation ecosystem and supporting emerging technologies, the EDF contributes to deeper domestic manufacturing capabilities and technology enabled product development.

Skill India Mission

Launched in 2015, the Skill India Mission continues to play a critical role in improving workforce readiness for Indias expanding manufacturing and industrial base. Under its flagship initiatives, over 1.64 crore candidates have been trained through PMKVY, 49.12 lakhs apprentices have been engaged through NAPS, and ITI infrastructure has expanded from 9,776 to 14,682 centres. As a result, the proportion of vocationally trained youth (15–29 years) increased significantly from 7.1% in 2017–18 to 26.1% in 2023–24, reflecting a near fourfold increase over the decade and strengthening long term labour availability for manufacturing led sectors.

National LED and Energy Efficiency Programmes (UJALA and SLNP)

Energy efficiency programmes remain central to Indias infrastructure and sustainability agenda. The UJALA scheme, the worlds largest zero subsidy LED distribution programme, has enabled installation of over 1.34 crore streetlights, resulting in annual energy savings of 9,001 million units and reduction of 6.2 million tonnes emissions per year.

of CO2

The Street Lighting National Programme (SLNP), branded as Prakash Path, has facilitated the installation of more than 13.1 million LED streetlights across urban and rural India, delivering annual energy savings of 8.8 billion kWh and monetary savings of Rs. 6,178 crore for urban local bodies and gram panchayats. Together, these initiatives support demand for energy efficient lighting, electrical infrastructure, and compliant FMEG products.

Production Linked Incentive Schemes

The Government continues to use PLI based interventions to deepen manufacturing scale and competitiveness. The Electronics Components Manufacturing Scheme (ECMS), launched in April 2025, supersedes SPECS with an enhanced outlay of Rs. 40,000 crore announced in the Union Budget 2026–27. The scheme has already received investment commitments of Rs. 1.15 lakh crore, the highest recorded in the electronics sector, with 46 applications approved across 11 states. It is projected to generate Rs. 3,67,343 crore of production value and 1,41,801 direct jobs. Such large scale investments strengthen upstream supply chains and manufacturing ecosystems that benefit downstream consumer industries.

India AI Mission 2.0

Approved in March 2024 with a financial outlay of Rs. 10,371.92 crore over five years, the India AI Mission 2.0 aims to expand AI education and capability development across 500 universities nationwide. The programme provides industry aligned curricula, shared compute infrastructure, and research support, mirroring the semiconductor skilling model already operational across 315 universities. The initiative is expected to commence within six months of the Union Budget 2026–27 and is likely to boost productivity, automation, product design, and advanced manufacturing capabilities across industries.

Solar Adoption

Installed solar capacity in India reached approximately 122.5 GW in 2025, with continued growth expected across utility scale, C&I, and rooftop segments. Solar adoption is driving incremental demand for low voltage switchgear, protection devices, wiring devices, and energy efficient lighting used in system safety and internal power distribution. Programmes such as PM KUSUM and PM Surya Ghar Muft Bijli Yojana are further accelerating decentralised solar adoption across agricultural and residential applications.

FMEG Industry Scenario

Ceiling Fan Industry

Despite high penetration, category growth is increasingly driven by value premiumisation, led by BLDC adoption, decorative variants and smart models. Growth is underpinned by Indias tropical climate, rapid urbanisation, and government housing schemes like PMAY, which generate first time appliance demand in previously underserved areas. Urban expansion across Tier II and Tier III cities, combined with increasing rural electrification, continues to widen the addressable market. Indias urban infrastructure has attracted

Rs. 30 lakh crore in investments over the last decade, with a further

Rs. 10 lakh crore expected over the next four years providing a strong tailwind for sustained fan demand across residential and commercial segments.

During FY 2025-26, Indias ceiling fan industry experienced uneven volume growth driven by weather volatility and demand seasonality, while value growth was supported by continued premiumisation. Demand was aided by replacement and upgrade cycles, with consumers increasingly shifting from conventional induction fans to BLDC, decorative, and smart variants to manage rising electricity costs and improve aesthetics. Geographically, North India continued to anchor industry volumes, while South and select Tier II cities showed faster adoption of premium offerings.

LED Lighting Industry

Indias LED lighting market remains poised to be on a growth trajectory and is expected to expand from USD 12.54 billion in 2026 to USD 18.8 billion by 2031, reflecting a CAGR of 8.4%.

Government-backed infrastructure and street lighting programmes supported institutional demand in FY 2025-26. Mandatory energy efficiency norms for commercial real estate are increasingly positioning LED as the default lighting solution rather than an upgrade. At the same time, domestic manufacturing scale up under the Production Linked Incentive (PLI) framework, combined with declining component costs, is improving affordability and expanding addressable demand.

In consumer lighting, while price erosion continued leading to muted value growth, volume demand was driven by replacement cycles, energy efficiency drive and rising preference for design led and higher-lumen products, particularly in urban markets. Competitive intensity remained high, especially in commoditised SKUs. The growing reach of organised retail and e-commerce platforms is supporting deeper penetration, particularly in Tier II and Tier III markets, while Tier I cities are witnessing early adoption of IoT enabled smart lighting solutions across municipal and commercial projects.

Switchgear, Wires & Cables industry

The switchgear, wires and cables industry remained closely linked to real estate completion cycles and infrastructure execution, and influenced strongly by commodity price fluctuations, resulting in moderate but improving demand momentum during the year and high value growth linked to commodity price increase for wires. While project led demand saw some timing variability, the industry benefited from a sustained shift towards organised, branded, and quality certified products, driven by stricter standards and enforcement. The wires and cables segment is expected to grow at 1.5x to 2x of real GDP in the near to mid-term, supported by infrastructure led demand, housing construction and renovation activity, and replacement of ageing electrical networks.

The gradual transition from basic utility switches to design led and smart offerings is strengthening the relevance of organised players with strong branding, distribution reach, and electrician engagement in the Switches and Switchgear segment. Value growth was supported by premiumisation, improved mix, and increasing preference for modular, aesthetic and integrated electrical solutions.

While near term demand may be influenced by commodity price movements and construction seasonality, the medium term outlook for the industry remains structurally constructive, supported by sustained housing demand, infrastructure investment, and increasing emphasis on safety, quality, and design in electrical installations.

Company Overview

Orient Electric is one of Indias leading consumer electrical brands, offering a diverse portfolio spanning fans, lighting, home appliances, switchgear, switches and wires. Backed by 70+ years of expertise, the Company has built its reputation on continuous innovation, strong R&D capabilities, and a commitment to manufacturing cutting-edge products that meet the evolving needs of modern consumers.

The Companys products reach consumers through an extensive network of 1,35,000 retail outlets, with service coverage across 450+ cities. Recognised as one of Indias largest fan exporters, the Company has a global footprint across 36 countries, supported by a dedicated team of 1,204 employees.

Growth is anchored in a well-developed manufacturing and supplier ecosystem, robust R&D, and a multi-product strategy that balances innovation, distribution strength, and premiumisation.

OPERATIONAL REVIEW

Balanced Portfolio

Orient Electrics growth strategy is anchored in its "One Orient" vision, which enables the Company to pursue multiple growth opportunities without fragmenting organisational focus, while maintaining execution discipline, operational efficiency and consistency in customer experience. Shared capabilities across design, product development, supply chain, data, service and digital platforms allow strengths in mature businesses to support emerging categories, a unified and integrated operating framework that brings together a single brand architecture, shared sourcing capabilities, complementary distribution and service infrastructure and centralised digital and technology platforms.

The company is building multiple growth engines across its portfolio by scaling diverse businesses, expanding presence across newer channels, and addressing evolving customer cohorts. Alongside strengthening its core categories, the Company is increasing focus on premium, energy efficient and design led products, while leveraging e commerce and emerging channels to deepen engagement with younger, urban and upgrade driven consumers. This multipronged approach enhances resilience and supports sustainable long term growth.

Electrical Consumer Durables

The ECD segment grew by 5.6%, delivering a resilient performance in FY 2025-26 despite a muted summer for cooling products. A key driver of growth was BLDC fans, which grew by approximately 47%, while premium mix (incl. BLDC, Deco, premium fans) contributed

~34% of domestic ceiling fan sales. The Company is expanding its BLDC range across price points and extending BLDC technology into TPW and exhaust fans, thereby completing its BLDC offering across all fan sub categories. Fan exports also grew by approximately 23% YoY during the year.

The Company continued to strengthen its premium and differentiated portfolio, including an expanded range of Smart Fans and the launch of Indias first oxygen generating fan, Aero O2, under its flagship Aero series. Its focus on design led innovation received global validation during the year, with its ceiling fan designs being recognised with the prestigious Red Dot Design Award, reinforcing the increasing role of aesthetics and user centric design in consumer purchase decisions. Continued investments in R&D and industrial design remain central to the Companys strategy, supporting the launch of energy efficient, feature led and differentiated products aligned with evolving consumer preferences.

Orient Electrics ECD strategy is built on premiumisation, smart innovation, and distribution expansion led growth across fans, water heaters, irons, and room heaters. In appliances, Product differentiation through proprietary technologies, enhanced safety features and new designs supported consistent double digit growth in the heating category during FY 2025-26. Increasing e commerce traction further strengthened reach and mix. Looking ahead, the segment outlook remains positive, supported by ongoing premiumisation and rising consumer preference for energy efficient products.

Lighting and Switchgear

The Lighting and Switchgear segment delivered robust growth of 12.2% in FY 2025-26 outpacing the industry, with Consumer Lighting gaining market share consistently, in spite of headwinds of price erosion. The focus on premiumisation, distribution expansion efforts, supported by strong marketing and retail visibility initiatives led to an increase in luminaires contribution to ~64%.

Professional Luminaires growth was driven by street lighting and fa?ade projects with continued focus on building a robust project pipeline. The ongoing focus on new product development in key potential segments like Data Centres and Tunnel and Street Lighting led to several new launches, spanning remote-monitored streetlights, BMS-integrated data centre solutions, and high-efficiency industrial HighBays (up to 190 lm/W) with smart controls and weatherproof luminaires.

Under its One-Orient vision, Orient pursued a focussed agenda centred on premiumisation, innovation, and omni-channel expansion. Capability building was advanced through various training sessions, while market presence was strengthened across modern trade, e-commerce, and quick commerce.

Switchgear, switches and wires, while smaller in scale today, represent a strategic growth opportunity within the One Orient framework. These categories benefit from structurally strong demand drivers such as housing growth, electrification, renovation activity and increasing safety awareness, and show promising growth.

Wires revenue doubled in the current financial year while switchgear and switches maintained double-digit momentum, supported by a scaled electrician loyalty programme and wider reach across key outlets. This continued focus on distribution and channel fundamentals has created a strong base, positioning us well to enhance market share and deliver sustainable high growth.

Market Reach

Orient Electric further expanded its direct market reach and service infrastructure during the year. The Direct to Market (DTM) model gained traction across 12 states, with ~8,000 new retailers added across all DTM markets, including the successful transition of Pune from a master distributor model. This expansion reinforced the Companys commitment to deeper market penetration and agile distribution. On the ground, the Company continues to build effective dealer networks and retail presence across both channel types.

Enhanced Service Delivery & Customer Experience

Service delivery capabilities were significantly strengthened during the year, with Madhya Pradesh, Chhattisgarh and the Northeast states brought under direct service coverage, expanding the Companys controlled service footprint. A 4 hour service commitment for fans and water heaters was also rolled out across 18 major cities, underscoring Orient Electrics sharpened focus on customer responsiveness and after sales excellence. These initiatives translated into materially faster response times and more efficient last mile service delivery, driving a meaningful improvement in overall customer experience. The service partner ecosystem was further scaled, with the network expanding to 1,000+ service partners covering

~19,000 PIN codes, enhancing service reach and reliability across geographies.

In parallel, the Company continued its strategic transition from voice heavy customer interactions to digital first service channels. Non voice channels gained strong traction, accounting for ~16% of total service requests in FY 2025-26, leading to lower average resolution times and more accessible customer touchpoints nationwide. Orient Electrics partnership with the National Consumer Helpline remains central to its on-call resolution commitment.

Key initiatives during the year included the launch of Samvad, our customer listening platform, which engaged 400+ employees and capturing 50+ exclusive in-depth customer insights to surface real-time insights on product gaps and service needs. We also started measuring our Net Promoter Score (NPS) reflecting our strong focus on active customer listening to build trust and advocacy.

E-Commerce and Direct to Consumer (D2C) Expansion

Orient Electric strengthened its Direct-to-Consumer ecosystem through a well-integrated presence across e-commerce, quick commerce, and its owned platform, orientelectric.com, enabling deeper consumer engagement and accelerated growth across multiple categories. On e-commerce, the brand expanded its premium fans portfolio, driving market share gains. Strong momentum was also built in Appliances, with strengthening of water heater range across storage and instant categories and driving high growth in Room Heaters and Irons across platforms. The year also saw increased availability of Lighting products supported by high-impact visibility during marquee events.

Quick commerce emerged as a key growth driver, with Orient Electric becoming the leading fans brand on Blinkit. The platform also saw strong acceptance for lighting and small appliances.

The brands owned platform, orientelectric.com, evolved into a high ASP channel, delivering a seamless and content-rich consumer experience. It played a critical role in supporting campaigns, driving new product discovery, and improving customer satisfaction through faster deliveries enabled by a strengthened supply chain network.

Brand Promotion & Marketing

Orient Electric adopted a cohesive, insight-led marketing approach to build a modern, differentiated brand narrative across categories. A unified podcast-style communication route anchored campaigns for fans and lighting, resonating strongly with younger consumers and driving a measurable uplift in brand consideration and preference. This was supported by a robust always-on content engine across social platforms, ensuring continuous engagement and relevance. High-impact integrations during the Indian Premier League, along with contextual digital innovations using platforms enhanced reach and recall. Influencer-led storytelling, including amplification through Kusha Kapila partnering with brand ambassador MS Dhoni, strengthened the brands appeal among diverse audiences.

In lighting, deep OTT integrations with leading shows enabled seamless product placement and drove market share gains. The water heaters campaign, Fatt Se Garam Season 2, featuring MS Dhoni, combined digital film and creator amplification to deliver strong share of voice and growth across channels. Targeted engagement with the electrician community and strategic participation in platforms such as ACETECH strengthened trade connect, generated high quality leads, and reinforced Orient Electrics position as a forward-looking, innovation-led brand.

AI Integration

Orient Electric strengthened its digital and technology foundation in line with the ‘One Orient vision, focussing on building unified platforms, enterprise data, and scalable AI capabilities. Key initiatives improved customer and channel engagement, enabled data driven decision making, and embedded AI across core workflows to enhance productivity and responsiveness. Investments in IT modernisation, cybersecurity, and data protection readiness ensured a secure and resilient operating environment. Collectively, these efforts positioned the Company for AI enabled scalable growth.

Product innovation

Orient Electrics portfolio strategy is centred on innovation, design led differentiation, and aesthetics driven premiumisation across fans,

Investments in IT modernisation, cybersecurity, and data protection readiness ensured a secure and resilient operating environment. Collectively, these efforts positioned the Company for AI enabled scalable growth.

lighting, heating and switchgear. The Company is consciously shifting from utility led offerings to products that integrate performance with visual appeal, smart functionality and energy efficiency, reflecting evolving consumer preferences for contemporary, well designed home solutions. This approach has translated into strong acceptance of new launches, with new products contributing 24% to fan revenues during the year.

In fans, Orient Electrics BLDC portfolio combines advanced technology with new designs, including nearly 40 colour variants developed in collaboration with architects and interior designers, reinforcing the role of fans as both functional and d?cor elements. In appliances, the Company expanded its presence in premium products, including square shaped storage water heaters with enhanced features and warranties. The lighting portfolio continues to move towards aesthetic, value added formats such as COB solutions, track lights and downlighters, aligned with modern interior and commercial applications. Our Eurotech switchgear remains one of the more technology-backed offerings in the market.

This consistent emphasis on design, technology and aesthetics strengthens Orient Electrics brand positioning and underpins its strategy of building differentiated, future ready growth engines across the portfolio.

Premiumisation

Across categories, Orient Electric continues to drive premiumisation through design led products, advanced energy efficient technologies, and smart features that move consumers up the value curve. Increasing acceptance of BLDC fans, premium lighting products, and feature rich heating products is driving mix change and improving value perception of the brand.

Manufacturing

Orient Electric operates four manufacturing units in Hyderabad, Faridabad, Noida and Kolkata. FY 2025-26 marked meaningful progress across capability and capacity. During FY 2025-26, the Company strengthened its manufacturing and operational capabilities through targeted investments in backward integration, digitalisation, and sustainability initiatives to enhance efficiency, quality, and operational resilience.

At the Faridabad facility, initiatives included commissioning of a backward integrated paint shop, establishment of an in house motor manufacturing line aligned to the Companys patented technology platform, and implementation of online PCB reliability testing. End to end product traceability and automated material movement were introduced to improve process control.

The Noida facility focused on efficiency and technology enhancement across lighting and switchgear operations. ILAC MRA approval was received for lighting products tested at the Companys NABL certified laboratories, and the switchgear portfolio was expanded with advanced 6kA MCBs.

We also received an ILAC MRA approval for our lighting products, tested at our NABL-certified laboratory in Faridabad and Noida, reinforcing our commitment to global quality standards.

The Hyderabad facility, designed on Industry 4.0 principles, achieved end to end digitalisation through deployment of a Manufacturing Execution System (MES). Backward integration was strengthened with the commissioning of an in house TPW motor line, alongside the introduction of new BLDC TPW models and expansion of storage capacity. A dedicated fan testing and reliability laboratory was also established to enhance quality assurance and product validation.

Supply Chain and Logistics

Warehousing and transportation infrastructure was scaled in tandem with volume growth and market expansion. New warehousing facilities were established in Pune, Kochi, and Indore to support direct-to-market operations. Focussed infrastructure expansion was also undertaken for the Switchgear and Wires businesses. Capitalising on the rapid growth of quick commerce and modern trade channels, the supply chain was recalibrated to meet evolving customer requirements with optimised fulfilment solutions tailored across Tier 1, 2 and 3 markets. Spares and finished goods were consolidated across locations with optimised manpower deployment. Operational freight costs were reduced below prior-year levels through improved loadability, network rationalisation and consistent cost optimisation initiatives. The demand planning platform was successfully deployed across three business units using digital planning tools targeting a 15% improvement in forecast accuracy and a 2% reduction in inventory carrying costs. QR code traceability adherence for warehouse inward and outward movements was strengthened by 25% across multiple business units.

People, Culture and Capability Building

Orient Electrics people strategy is built on the pillars of diversity and inclusion, empowerment, training and skill enhancement, employee engagement and leadership development. As of March 31, 2026, the Company employed 1,204 employees, with overall gender diversity at 7.1%. During the year, continued focus on people friendly policies, capability building, and inclusive practices further strengthened Orient Electrics commitment to building a people centric organisation.

As part of its commitment to diversity and inclusion, the Company continued to advance "She Rise", a dedicated initiative designed to holistically empower women employees through curated forums focussed on personal and professional development, leadership capability building, and open platforms to voice ideas and drive positive change. The initiative reinforces the Companys focus on creating a safe, supportive and inclusive workplace, while enabling richer perspectives and stronger collaboration across teams.

The Company remained focussed on nurturing a workplace culture rooted in care, respect, and continuous learning, strengthening engagement and long term organisational resilience. This sustained emphasis on people practices received consistent external recognition, with Orient Electric being certified as a Great Place to Work? for the seventh consecutive year and also recognised as Indias best workplaces in Consumer Durables 2025.

FINANCIAL REVIEW

Performance

FY 2025-26 represented a year of steady progress and relative outperformance for Orient Electric, supported by portfolio premiumisation, market share improvement in key categories, and disciplined execution. In the fans business, the Company delivered a stable performance despite a muted summer, supported by continued premiumisation and strong growth in BLDC segment, which helped sustain value growth. Increasing contribution from Direct to Market (DTM) and e commerce channels further supported mix improvement and engagement with newer consumer cohorts, while exports led by fans also contributed positively during the year. Within Electrical Consumer Durables, the heating category recorded double digit sales growth, reflecting portfolio strengthening and distribution strengthening.

In consumer lighting, the Company strengthened its market position, with luminaires increasing to 64% of the portfolio mix, up from 60% in the previous year. This was driven by improved traction in COB lights, downlighters and panels.

The wires business scaled meaningfully, with revenues doubling on a relatively small base, while the switches segment delivered high double digit growth, supported by deeper electrician engagement and cross selling through the existing distribution network. Export sales grew by 23%, primarily led by fans, with continued focus on SAARC, the Middle East and Africa, further strengthening the Companys international footprint and diversification over the year.

Cost Leadership

Promoting Cost Optimisation through Project Sanchay

Project Sanchay continued to drive the Companys cost efficiency promotion efforts during FY 2025-26 Sanchay – a Hindi word that means "to conserve" or "to save", is a transformation initiative aimed at structured ideation, rigorous implementation and collaborative synergy. It also seeks to embed in the organisation a culture of continuous improvement, frugality and ownership. It involves comprehensive cost assessments, covering contract renegotiations, IT licence optimisation, and overhead rationalisation. During the year in review, the programme delivered savings of Rs. 68 crore, underscoring Orient Electrics sharp focus on disciplined execution and cross-functional synergy.

Financial Strength and Stability

Key Financial Metric	FY2025-26	FY2024-25
Revenue from Operations (Rs. Crore)	3,326	3,094
EBITDA (Rs. Crore)	229	204
Profit After Tax (Rs. Crore)	96	83
Earnings Per Share (Rs.)	4.49	3.90
Expenses (Rs. Crore)	3,197	2,993
Gross Margin (%)	31.10	32.10
Return on Equity (%)	12.61	11.98
Working Capital (in days)	30	26
Current Ratio (in times)	1.42	1.33
Debt-Equity Ratio (in times)	0.03	0.02
Trade Receivables Turnover Ratio (in times)	5.75	6.16
Inventory Turnover Ratio (in times)	5.36	5.64
Debt Service Coverage Ratio (in times)	4.13	3.65
Net Profit Ratio (%)	2.88	2.69

Business Outlook

Looking ahead, Orient Electrics business strategy is focussed on three clear priorities. The Company will continue expanding its premium, design led portfolio with high value aesthetic solutions. Management expects continued momentum across categories, backed by distribution deepening, digital push, and new product launches. Premiumisation and energy efficient offerings should drive margin improvement as demand recovers across urban and semi-urban markets.

Corporate Social Responsibility

Orient Electrics CSR spend of

Rs. 2.21 crore in FY 2025-26 underlined its strong commitment to community welfare. The CSR expenditure covered the areas of electrician upskilling, rural school education, womens empowerment, animal welfare, and cancer healthcare — reflecting a portfolio that connects directly to the communities and the trades within which the Company operates.

Internal Controls

Internal controls are central to Orient Electrics governance framework. The Company maintains a robust control system, continuously strengthened through focussed audit plans — including pre-audit and interim audits across new operational areas. Regular process reviews reflect the Companys disciplined approach, with assessments used to ensure integrity, transparency, and accuracy of accounting records, while enabling reliable and timely financial reporting in accordance with applicable laws and standards

Risk management is supported by a structured Internal Financial Control Policy, complemented by the Whistleblower Policy and Fraud Risk Framework Policy, enabling early identification of risks and prompt action by senior management.

An independent internal auditor conducts a comprehensive audit programme across the organisation, with key findings and high-risk observations presented to the Audit Committee and Board on a quarterly basis.

The Internal Audit function evaluates the effectiveness of the Companys control environment, with findings and recommendations acted upon promptly. Regular follow-ups ensure proper closure, reinforcing strong financial discipline and sound governance practices.

Cautionary Statement

This discussion and analysis, contain what we call ‘forward-looking statements. These are the predictions or expectations about the future performance of the Company. They are based on the Companys current objectives, projections and estimates. However, these statements do not guarantee future performance. They are subject to laws and regulations and involve uncertainties and risks.

The actual results may be quite different from the predictions. This could be due to various factors that affect the Companys operations. These include competition in the industry, the cost of employing staff and significant changes in Indias political and economic environment. Other factors include environmental standards, tax laws, legal disputes and labour relations. It is important to remember that these forward-looking statements do not guarantee future performance. They should not be relied upon too much. They involve both known and unknown risks and uncertainties. These could cause the actual performance and financial results in the future to be significantly different from the predictions. It is advised not to depend on these forward-looking statements. The Company will update them as required by securities laws but will not commit to updating them if circumstances change or if the estimates or opinions change. In conclusion, while these statements provide a glimpse into the Companys future, they are merely predictions and are subject to change. Therefore, they should be used with caution and not be the sole basis for any decision making.