Orient Electric Ltd (NSE: ORIENTELEC) Q1 2026 Earnings Call dated Jul. 25, 2025
Corporate Participants:
Ravindra Singh Negi — Managing Director and Chief Executive Officer
Analysts:
Bhavani Kumawat — Analyst
Natasha Jain — Analyst
Nirransh Jain — Analyst
Keshav Lahoti — Analyst
Aditya — Analyst
Sonal — Analyst
Dhruv Jain — Analyst
Arshia Khosla — Analyst
Shiv Kumar Prajapati — Analyst
Prathamesh Rane — Analyst
Nikhat Koor — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Orient Electric Q1 FY ’26 Earnings Conference Call hosted by Axis Capital Limited. As a reminder, all participants lines will be in listen-only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star 10 on your touchstone phone. Please note that this conference is being recorded.Thank you. I now hand over the conference to Mr Bhavani Kumawat from Axis Capital Limited.
Bhavani Kumawat — Analyst
Good evening, everyone. On behalf of Axis Capital, I welcome you all to Orient Electric Q1 FY ’26 earnings ConferenceCall. Today, we have with us management represented by Mr Ravindra, Managing Director and Chief Executive Officer; Mr Arvind, CFO; and Mr Samal Jain, Head, Investor Relations. We thank Electric management for giving us the opportunity to host the call and would now like to hand over the floor to management for their opening remarks, post which we’ll open the floor for Q&A. Thanks and over to the management.
Ravindra Singh Negi — Managing Director and Chief Executive Officer
Thank you. Thank you,, and thank you, Bhawani. Good evening, everyone. A warm welcome to all of you to Orient Electric’s Q1 FY ’26 earnings conference call. We hope you have the opportunity to review our financial results and earnings presentation, which are available on the stock exchanges and our company website. Q1 FY ’26 unfolded in a highly dynamic environment. At the start of the quarter, the sentiment across the electrical and consumer durables sector remained cautiously optimistic, underpinned by expectations of a broad-based recovery, infrastructure-led momentum, channel expansion across Tier-2 and Tier-3 markets and a well-anticipated robust summer seasonal demand.
However, the quarter presented notable headwinds for the industry. Contrary to the intense summer of 2024, India experienced relatively mild temperature levels. The phenomenon started with the South southern states and then continued across the rest of the country. Alongside this, the record-beating rainfall in May in a way ended the summer before it even began. This Unexpected climate shift disrupted the seasonal sales cycle and inventory planning across the industry. Additionally, a brief period of market softness was observed during heightened geopolitical tensions, temporarily affecting sentiment and market momentum. Despite these headwinds, Orient Electric demonstrated resilience and agility. We remain focused on agile execution, deepening market penetrations and aligning our portfolio with evolving consumer preferences. Electric reported a year-on-year growth of 2%, reflecting a tempered performance amid a challenging operating environment, while sustaining its momentum on gross margin expansion, navigating category-specific headwinds. Our continued focus on premiumization, innovation and channel expansion enabled us to maintain momentum across key segments. And we see quarter one as a seasonal impact rather than a structural industry impact. Customer-centricity embedded in our DNA guides our strategy at Orient from product development to marketing strategy. The company continued its focus and differentiation across the portfolio, increasing accessibility across channels, enhancing customer experience and building a robust digital strategy to guide consumers through their product research journey, increasing consideration for our brand. Premiumization enabled us to elevate customer value, enhance brand perception and deeper consumer engagements across our categories. In the lighting segment, we continue to stay focused on to bring more value-added products and our distribution and NPDs continue to reflect that. Our value-added product share to the overall sea loom business has remained consistent at 55%, which is in-line with the leading players in the industry. In the fans segment, we launched a premium range of BLDC fans under the technics design campaign. Our BLDC fans sales grew over 50% year-on-year, reflecting our commitment to energy-efficient innovations. Overall, our NPDs in the fan category now contribute more than 20% to primary sales, with our premium mix improving by almost 250 basis-points year-on-year, accounting for about 30% to 35% of our ceiling fan sales. Our retail experience programs, Mission Orange and Project Spotlight played a pivotal role in boosting premium product awareness and adoption through an experiential retail push, enabling touch and feel and live demos at retail outlets. Even in our heating appliances category, we have launched new premium storage water heaters with better features and warranties, which give uniform brand experience to the customers. We invested significantly in brand-building this quarter, especially during high-impact period like the IPL season. These campaigns reimagine fans in the context of modern homes, embracing cutting-edge technology with future-ready features, design and finishes. Through these campaigns, we have not just showcased our premium BLDC fans differently, but presenting an exciting narrative that captures the evolving preference of new-age customers. While these investments have led to some increase in advertising costs, they have laid a strong foundation for a long-term margin expansion and brand equity. We will continue to spend close to 4% or 5% of our revenue to building preferences in our core categories of lighting and fans. Our strategic investments in-building emerging categories also continued to demonstrate progress. While there were delays in execution of key infrastructure projects, the lighting B2B business executed several key street lighting and facade projects such as, Shivaji Maharat Museum in Maharashtra and Sarna Temple in UP. We continue to witness a healthy pipeline of new inquiries, making us confident to sustain our growth trajectory in this segment. The consumer lighting business witnessed an industry-leading volume growth aided by new product developments and expansion of distributive partnerships, resulting in-market share gains. We also took a price increase during the quarter to pass-on the impact of regulatory changes within — which increased our comp. Our first on mix enhancement continued to yield results with an improved share of value-add products. Switchgears and wires category registered accelerated performance with high double-digit growth in the quarter. Our expansion of distribution network and building the electrication program — loyalty program continues. Our channel strategy on DTM continues to deliver better results. We added approximately 1,800 new retailers under the DTM network this quarter. Our e-commerce channel continued to see robust traction across categories. We are now participating in quick commerce platforms building on customer convenience, which validates our digital-first approach. These trends highlight the importance of channel agility and targeted portfolio interventions to navigate seasonal and category-specific challenges. Overall, the financial performance in the first-quarter of FY ’26 reflects both resilience and ongoing execution of our strategic priorities. We closed quarter one with a revenue of INR769 crores, marking a 2% year-on-year growth. While revenue was below our initial expectations due to weather-related impact, we continue to deliver better versus the broader industry. Our lighting and switchgear delivered approximately 7% growth. B2C lighting continued to outperform the industry with an overall single-digit growth in value and double-digit growth in volumes. Switchgear and wires had a high double-digit growth with lower base. The ECD segment remained stable with revenue at INR545 crores despite fan sales getting impacted. Fans reported a muted single-digit growth and appliances were impacted by more than 40% degrowth in. Water heaters witnessed double-digit growth. Our gross margins remained stable at 32.6% and we are in the 32% to 34% range, reflecting the benefits of channel optimization and a refined product mix. EBITDA stood at INR46 crores, a 15% year-on-year increase and the margins — EBITDA margins expanded by 68 basis-points to 6%. We remain committed to creating a stronger and relevant brand and we will continue to spend in the range of 4% to 5% of our revenues to build a well-balanced portfolio. As seasonal headwinds begin to ease and our structural growth levers continue to gain traction, we remain confident in our journey towards achieving double-digit EBITDA margins. Project Sanche, our transformation initiative remained a key pillar of our cost-efficiency strategy. In-quarter one, the program delivered a saving of INR9 crores, underscoring our focus on disciplined execution and cross-function synergy. Our working capital days stood at 25 days and a net cash position of INR72 crores as of quarter one end. Looking ahead, we remain confident about the strategic levers we have put in-place with the festive season buildup likely to happen across channels in-quarter two and likely improved consumer sentiment and spending. We are optimistic that festive period will give tailwinds to our category. With this, I would like to open the call for questions.Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.The first question is from the line of Natasha Jain from PhillipCapital. Please go-ahead.
Natasha Jain
Thank you for the opportunity and it’s heartening to see the positive efforts playing out in your numbers, sir, especially in limiting the downside better than peers this time. I have two questions. First, while your EBITDA margin has risen, both your segment EBIT margins have fallen. So can we attribute this cost entirely to unallocated expense? And would that largely be the consulting cost, which was there in the last quarter’s base, but absent? And therefore, going-forward, can we assume this as the runway?
Ravindra Singh Negi
Thank you, Natasha. And yes, I’ll look at the EBITDA. And if I look at 6%, firstly, if you look at it owners, that’s a 68 basis-point improvement. While the segmental results will have some impact because of overall of muted sales, especially in the ECD category and a larger than the usual inventories That we carry. Overall, if you look at it from the EBITDA margin perspective there will always be some hits and some gains, while there was some benefit of consulting that could have come, but there was larger spends on marketing that we’ve done. And I’ve always given the now — last-time also I gave a guidance of saying that in next seven to eight quarters, we took our efforts are to attempt and get to double-digit EBITDA margins. Our quarter one and quarter two, which is the H1 sees a little lower than what we see in the H2 margins. And our — if you look at our overall cost and other things, in fact, all the efforts have been put to bring the cost under control, it’s a factor of now getting the top-line in and we are well in true on our journey towards improved margins.
Natasha Jain
Understood, sir. Thank you for that answer. And my second question is on your lighting segment. Now while year-on-year comparison won’t make sense, but on a Q-o-Q basis, your EBITDA margin has improved very sharply. Given 1Q is seasonally a weak quarter and especially one of your peers who have also — who is also into premium lighting reported margin decline on account of price deflation. Now given that you also are exposed to COV and DOV, but your margins have been way better. So can you tell us how this margin improvement happened and is it sustainable going-forward.
Bhavani Kumawat
I think the house is slightly strategic in nature. But broadly speaking, our complete effort on getting you know the premium or a value-add mix better has improved in our categories is what is helping us improve our margins. Secondly, as I said, we were slightly ahead of the curve from some of the other players in terms of passing on the price increase in the market, which happened due to the regulatory changes of ROHS compliance and everything. That helped us cushion any impact on the COGS and everything.
So I would attribute into that. Broadly, we’ve been in the same range of 29% to 31% 32% on our margins in the lighting. And I don’t see anything structurally changing in the next few quarters, at least from our side. If there is structural changes in industry that happens and it impacts, that’s something.
Natasha Jain
Yes, sir. Thank you so much and all the very best. T
Ravindra Singh Negi
Thank you, sir.
Operator
Thank you. The next question is from the line of Jain from BNP Paribas. Please go-ahead.
Nirransh Jain
Yes, hi, sir. Thank you for the opportunity. Sir, my first question is regarding the channel inventory for fans particularly. Is it fair to understand that the channel inventory for us and for the industry specifically for the and the won’t see a won’t be high considering that last quarter also we kind of alluded that being a self-penetrated category, we didn’t see of a challenge for most of the categories like, we saw a lot of restocking that happened.
So now what is the inventory position and is it fair to assume that for fans, we don’t see a large inventory buildup in the channel. So both as well for the industry.
Ravindra Singh Negi
Thanks for the question. And I think when I look at it and when you want to look at it overall national perspective, I think it’s going to be very difficult to say. There’ll be pockets where different products have placed differently. There are pockets where rains have come in early, summers have been far weaker and the product categories that get sold. Let me give you an example of South. South is largely a TPW market. Rains were higher there and much earlier than the usual level. There’ll be some bit of channel corrections that would have happened in the PPW category in the South.
There’ll be some channel corrections that happened in the north and east in the ceiling fan category. Overall, I think channel has corrected its inventories. More importantly, it’s not just the fans, there is this whole commonality of channel between fans and coolers also, cooler is an inventory which is still there in the trade and I think that has a little bit of impact on the overall channel inventories. But otherwise, yes, in the fans, across the country in different regions depending on the category being pushed, there is a little bit of channel inventory that would have got corrected in Q1.
Nirransh Jain
Got it, sir. And sir, my second question is on the — on the ECV segment again. So did I get that correctly that we took price hikes in the ECD also? Was it purely on the lighting segment?
Ravindra Singh Negi
We did take a price increase in fans in April and that was also a large bit of commodity fluctuations that was happening. But given the fact that there were a huge amount of demand-supply gap, I think a lot of corrections or discounting of competitive pressures that kind of got diluted within the quarter only.
Nirransh Jain
But I mean just continuing to the previously because even I’m just wondering what explains this sharp competitive drop-in the ECD margin because our BLDC, our premium is real when we are putting price hikes also. So — and then there is no new expenses also involved in this quarter, then what explain this to 30 of? I think the answer is the same discounting that would have happened, right? Or is there anything else?
Ravindra Singh Negi
No, the other is also if you look at it from a marketing expense spend it’s up by almost 60 70 basis point versus last year. We had invested and I said, typically 4% to 5% is what we will do in marketing. This quarter is about 5.5% and we invested anticipating a very strong summer as we — we were committed to IPL spend, which I think in the long-run has done the right thing to the brand equity and it was a good platform to launch a new BLBC range and the campaign which was far more youthful a very different campaign this season.
Nirransh Jain
I’m sure that’s very helpful but you can ask one more question at the time now?
Ravindra Singh Negi
Niraj, maybe you can come back when I’ll cut my.
Nirransh Jain
Thank you.
Ravindra Singh Negi
We can have the next question.
Operator
Ladies and gentlemen, please limit to two questions per participant and come back-in the queue for a follow-up. Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go-ahead.
Keshav Lahoti
Hi, thank you for the opportunity. So can you give me the exact volume growth in B2B and B2C side of lighting?
Ravindra Singh Negi
Keshav, hi, thanks. Thanks for the question. Typically, we don’t give exact volumes and B2B largely is not a volume gain, it’s a project gain. B2C is where the volumes matter. We’ve done double-digit growth in the volume side as far as this is concerned to your question.
Keshav Lahoti
On the direction side? Got it. Sir, broadly you have given EBITDA margin guidance double-digit for over seven, eight quarter, but possibly what sort of margin you are looking for this year and what sort of top-line growth you are looking?
Ravindra Singh Negi
We don’t give any forward-looking guidance, but just to give a broad thing, we — whatever strategies that we put, we should be better than the industry, much ahead of the curve. And that is what is also reflecting in some of our market-share gains in fans and lighting, which we track through a third-party. But we don’t give a forward guidance like that.
Keshav Lahoti
Got it. One last question from my side. As we understand and you said fan channel inventory has reduced, but possibly still it’s elevated. That is a fair understanding and what we expect it to be normalized.
Ravindra Singh Negi
As I said, these are all different nuances of regions. To my other thing, I think it should be at a normalized level and I think quarter two is a test of that.
Keshav Lahoti
So because of channel inventory, at least volume won’t be impacted in Q2 for bank at least for OEM electric, right?
Ravindra Singh Negi
Kesha, we’ll have to see that and come back. We are very optimistic given the fact that there is festive buildup that will happen in Q2, given the fact that Diwali this time is slightly earlier than the usual.
Keshav Lahoti
So we are optimistic on that. understood. Got it. That is helpful.
Ravindra Singh Negi
Thank you very much sir. Thank you.
Operator
Thank you. The next question is from the line of Aditya from Securities Investment Management. Please go ahead.
Aditya
Yeah. Hi, sir. Thanks for the opportunity. Sir, so we have insourced the production of. We have backward integrated to producing BLDC motor and with a strong design and customer knowledge, so how are the timelines between conceptualization to commercializing a new product reduced over the years. And can we expect the pace of new product innovation increasing moving forward as well?
Ravindra Singh Negi
Hi, thanks for this question. And I think what we’ve done is, there are two-parts when we looked at PCB and we got PCB in-house. A, was to own the design and get a better-quality and that we’ve seen from our launches that we’ve done. The second is from a perspective of timelines around at least on the BLDC side, we are seeing about 10%, 15% reduction in our NPD timelines. We intend to squeeze it further and as we speak, there are work happening on saying how do we bringe it how do we reduce it? But the larger thing is that we spend a lot of time looking at what are the consumer issues that we can solve for and that’s what we are about. But we are working at overall timelines.
I hope that answers your question.
Aditya
So understood. And sir, if we look at our annual report, so we have talked about improving our service timelines. So if you could just help us understand qualitatively what are we doing to improve our servicing capabilities and how are we placed against competition in this regard? So have we reached their levels or there is still some catching-up to do?
Ravindra Singh Negi
Yeah. So there are two things, a couple of things that we’ve done. The first thing is that across the markets, we’ve got almost about 12 states and larger areas, which are directly serviced by us now. Are there 19,000 out-of-the possible 19,700, 800 twin codes that we’ve serviced last year. We’ve used a lot of digital platforms and we’re kind of digitizing using AI bots on our consumer touch points.
We measure the 24 hour tags and we measure the 48 R tats. In some of the cities in the peak seasons and category-specific, we also look at eight-hour. So those are things that we’ve done. I can’t share the TAT numbers and other things. But our TAT or turnaround times within those specified has improved dramatically. We’ve put a lot of efforts to get our digitization and bots put at the customer touch points. We’ve also as management started program called where we listen to consumer voice.
And that’s the core of core of what we are wanting to build. It’s a very consumer-centric. We want to understand here the voice of the consumer and that’s — that’s the large effort that we’re doing. But overall, from a service point-of-view, we’ve seen sharp improvements. We’re getting that feedback also from the consumers and we are we — as we go, it’s a continuous journey that we do. And we put our service partner network is almost 1,000 plus service partners, which make sure that these 19,000 PIN codes are adequately serviced and looked at.
Aditya
And sir, how do we fare against competition in this regard? So our business still some work to do or we have compared with them?
Ravindra Singh Negi
So, so it will be unfair for me to comment on it. Then I talk about market shares and other things, we don’t put it from our perspective. We looked at third-party data. Unfortunately, in the service, there is no third-party data, which benchmarks or at least we don’t subscribe to these reports, which benchmarks it.
My feel is that from a consumer and we look at from a consumer perspective, my customers seem to be acknowledging the improvement in our service and that’s what we track it.
Aditya
Got it. I think just two bookkeeping questions. If you could just give me the lighting business, what is the B2B and B2C mix?
Ravindra Singh Negi
Given the fact that we are restricting two questions, you can come back to the queue and I’ll take more questions from you later.
Aditya
Sure, sir.
Ravindra Singh Negi
Thank you.
Operator
Ladies and gentlemen, please limit to two questions per participant and come back-in the queue for a follow-up. Thank you. The next question is from the line of Sonal from Persiant Capital. Please go ahead.
Sonal
I have Mr Sonal from Precient Capital. I hope I’m audible.
Ravindra Singh Negi
Yes, Sonal, we can hear you.
Sonal
Sure, sir. Thanks for taking my question. Sir, first, I wanted to understand on the ECD business. I think if you look at the EBIT margins for Q1 ’25 and this quarter, could we attribute the reason for a dip in EBIT margin. If you could just qualitatively explain the reason for the debt?
Ravindra Singh Negi
I think I answered this question. I think Keshav spoke the ranch somebody had asked. There were a couple of things. Obviously, there was this inventories which have gone in, there was marketing expenses which have been much higher than the usual there is almost a 70 basis-point extra that we’ve spent.
The top-line has not happen the way it was supposed to happen. So there are lot of factors which are there. But by and large, as I said, it’s largely an external impact, not a structural impact, which is going to bring the margins down. Obviously, the other factor was also competitive pricing pressures, while we did take a price increase in April, but the benefits of that got kind of marginalized due to pricing pressures.
So there were multiple factors, if I were to give you a holistic view, these were the factors that would have impacted. Is there anything structurally impacting. No we continue to focus on streamization. Our NPDs now contribute more than 20% of our business and structurally we are in the right direction. So it’s a blip in the margins is what I feel.
And obviously, one more thing is on the ECD margins, cool minus 40% and above. That’s a one-time impact that the industry will go through. So given demand hopefully it recovers, these margins should restore to higher levels as there is nothing structural. We anticipate that.
Sonal
Got it. Sir, my second question is with regard to BLDC and as an End-User as well as, I think as a shareholder, I think what we’ve understood is that Orient is actually working very hard to have a good list of products at the entry-level as well as the premium level compared to the competition. So not taking needs, but where are we in terms of our like-to-like products vis-a-vis other two, three leading players in the?
Are we there in terms of product, pricing specifications or there is some work to be done there? Just wanted to understand that.
Ravindra Singh Negi
So there are two kinds of — one data point that I’ll put across is saying, if we’ve grown by 50% year-on-year on BLDC, which means there is traction which is coming in. We’ve launched — almost 80% of my new launches are on BLDC. I don’t know whether you’re an End-User or not, but I would encourage you to look at some of our new launches, whether it’s.
Sonal
I am, I work. I did — I served the market last quarter. That’s why I was asking this.
Ravindra Singh Negi
Yeah, that’s why. — and I’m sure you will appreciate the new designs and the minimalistic aerospeed that we’ve launched. We’ve catered to all the pricing segments and consumer needs in the BLDC. On-top of our designs and aesthetics, we’ve also said, look, fans are an integral part of your design requirement or our lifestyle requirement.
We’ve launched almost 40 colors and some of them are very nice well researched colors where we’ve gone to the architects, designers, consumers and picked it up from there. So we continue to do well in this segment and it’s a continuous journey and you’ll see more of it coming from our side.
Sonal
Thank you all right. Thank you, sir. I’ll fall-back in the queue. Thank you.
Ravindra Singh Negi
, thank you for being a loyal, Orient customer.
Sonal
Thank You.
Operator
Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Dhruv Jain
Hi, congratulations on good set of numbers in challenging times. Sir, my first question is on writing. So in your presentation, and OEM has been doing relatively better versus all the peers in terms of lighting growth. So just wanted to understand and you also mentioned about distribution expansion in lighting.
So just wanted to understand what is — there is COVID today relative to the universe of lighting distribution and how much of it is already packed? What I’m trying to understand is that this market-share gain opportunity and the outperformance, how much — how much years can it last for and how many quarters do you think that is in terms of market-share gains in the lighting sector.
Ravindra Singh Negi
Purov, thanks for your question. And let me just step-back and tell you in lighting, the gains are — it’s just a combination of things that you do. The first and foremost is how are you understanding and solving consumer needs. Second is what are the kind of products, what segments do you use. The third is a combination of technology and NPDs that you bring in.
And the fourth which supports all of this is accessibility and which is where the distribution is acting. And I think if I were to go by a third-party data, we are improving on our numeric distribution, we are improving on our weighted distribution, but I think if I were to compare with leaders, I think we still have a distance to go. Some of the markets in some of the states where you’ve done well and caught up on our numeric and weighted distribution. There are some regions in the country where we still have a work to do.
And I think that’s a task that we’ve already defined well for ourselves and we’ll continue to expand on numeric and weighted both. But it’s a combination of what all that we do and what we bring on to in a holistic manner that will give us the market-share gains. While the industry is reeling under the price erosion, we believe that what we have as an approach should help us gain and continue to gain market shares and values there.
Dhruv Jain
Sure, sir. And then you think that this price will continue, which will maybe the industry for quite some time, but are you seeing signs of this bottoming anytime soon?, as I said, we took a price increase in May. That has helped us in navigati
Ravindra Singh Negi
Ng some of the pricing pressures. How long will it last? As an industry, we were — I was hoping that it should — it should taper down. I think the rate of price erosion will now slow-down and we should see some of the slowdowns to come in. The good part for us is that we are getting volumes and look at this, if you gain volumes and you get market-share, when the price erosion slows down, that whole volume to value ratios will improve and that should give us further gains, at least on the value terms.So we are optimistic about that.
Dhruv Jain
Sir, my second question is on the finance of our plant. So obviously, we’ve made a very large investment there. So just want to understand from a three-year perspective of how much we would add to your in-sourcing level so if you can just give us the data point in terms of where you are in terms of content sourcing? And after the plant is fully scaled-up of their Orients overall and sources will be?
And how much of it can add to margins this way? Thank you so much.
Ravindra Singh Negi
So the you know between in-house and outsource, we don’t get to disclose the data. But as I said in the last call also, we’ve scaled-up well. There is this whole ecosystem of our strategic suppliers who moved with us to Hyderabad. Till last quarter when we were building up inventories for the season, almost 50% of our TPW was coming from Hyderabad. It’s — we’ve had a little bit of an industry has had a little bit of slowdown, but that’s a one blip.
But in the next three years, we — we put enough capacities to take care of our next three years requirement outpace the industry. So at our peak capacity, we do see cost benefits to come in and that will all start reflecting in our margins. But the question is to know for the industry to start coming back to the growth — volume growths, which got impacted in a season like this, but we are optimistic that season would start building up now.
And then there is the ratcheting ceiling plant ratcheting, which will happen on 1st of Jan. So that should start seeing some volume growth for the industry.
Dhruv Jain
Great. Thank you so much and all the best.
Ravindra Singh Negi
Thank you.
Operator
Thank you. The next question is from the line of Arsha Khotla from Nirmal Bank Institutional Equities. Please go-ahead.
Arshia Khosla
Yeah, hi. Thank you for taking my question., my question is like in the previous quarter, we have mentioned that we listed ourselves in the quick commerce platforms. So just wanted to understand what our products are in the platforms and how is — and others substantial for us?
Ravindra Singh Negi
Thanks. Yes, we did our products are available on quick commerce, both Blinked, Zepto are and we will also look at other platforms which are coming in. Largely all our products and SKUs, which are very intuitive convenience that the consumer would look at it or whether it’s a fan in the summers that they want. We had coolers there, we’ve got there, we’ve got irons there, we’ve got lighting products there. We’ve got the wiring accessories there.
So as we scale-up, and I said, we are solving for consumers and consumer convenience, this platform is meant for consumer discovery and convenience. We are participating well there. Understood, sir. But has it started adding on to our sales as of now.
Yes, it has, but is it very significant in terms of, you know, if your question is that — if it’s quite like FM, CG and especially the staples, it will not be that for the industry as of now, but we do see this as a platform where consumers will look at some of the categories or some of the products where convenience in hair and now is required.
Arshia Khosla
I understood, sir. That’s helpful. Thank you.
Ravindra Singh Negi
Thank you,.
Operator
Thank you. The next question is from the line of Kumar Prajapati from Ambit Investment Advisor. Please go ahead.
Shiv Kumar Prajapati
Yeah, hi. Thanks for having my question. So my first question, given our GTM success in South and upcoming rollout in few more zones, what has been the observed retailer churn rate from competitors, say Crompton or Usha or some other players?
Ravindra Singh Negi
Sure, thanks. Thanks for the question. And what you don’t look at is the churn because most of the retailers are multi-brand outlets. What you look at is the counted share and we are seeing a — and when I say when I get a better market-share, my counter shares go up. So we see three parameters when we look at our success and which lead — which are lead indicators for our output of market-share, ND, WD and counter share.
And all three when we do this, we look at these lead indicators. When these lead indicators needle starts to move-up, we know that the market-share will go up. So it’s not the churn that happens, you get a slightly better counter shares.
Shiv Kumar Prajapati
Okay. And sir, given the strategy live in multiple states, so how are we measuring our cost-to-serve or say order fill rate compared to the legacy model?
Ravindra Singh Negi
So our logistics, when we go-direct to a particular market, we put up a logistics support there and we’ve got our own logistics performance and fill rate measurements that we track it. In all our markets, whether it’s MD market or a DTM market, our endeavor is to make sure that whether it’s the end-consumer or the Retail, those are serviced well and all our markets, including our MD markets. So that’s something that’s — that they work on.
Shiv Kumar Prajapati
Okay. And sir, is there any categories that you are considering to exit due to poor scalability or margin dilution? Not as of now shift. If we ever do, we will let you know.
Sure, sir. Can I keep in another question?
Ravindra Singh Negi
Actually, we can come back to the queue. S
Shiv Kumar Prajapati
O I don’t you so much.
Ravindra Singh Negi
Thank you.
Operator
Thank you. The next question is from the line of Prathamesh Rane from Elara Securities. Please go ahead.
Prathamesh Rane
Yeah, hello, sir. So congratulations for the two quarters despite the challenge my only question was that did you witness volume degrowth of 40% in schools or as an industry perspective you are talking about like.
Ravindra Singh Negi
So, thanks. As I said, we would — we’ve looked at when I say 40% and more, that’s the value volume degrowth for us. From an industry perspective also, while I don’t have industry mind, third-party indications data says that industry would also be in that range because unlike anything else, this product has a very short consumer offtake window, practically speaking six to eight weeks and that six to eight-week unfortunately got impacted with earlier than usual rains across the country.
Prathamesh Rane
Got it. Got it, sir. Thank you, sir. I’ll fall-back in the queue.
Operator
The next question is from the line of Nikhat Koor from Dolat Capital. Please go-ahead.
Nikhat Koor
Thank you for taking my question. Sir, my question is regarding solar products. So solar products is gaining a lot of traction. So are we looking to enter any solar product category?
And my second question is regarding the BEE transition, now that the fans industry will see — will see a PE transition from 1st Jan, so are we expecting any kind of disruption or any kind of price increases ahead of the PEE energy change?
Ravindra Singh Negi
So, thanks as we speak, we have some of the solar products in our lighting, both from a B2C perspective and from a B2B perspective, we have solar products there. Getting into more solar products, which are from an end-consumer perspective, we keep evaluating that. If the question is, are we going to get into solar category, maybe, maybe not as of now. Your second question was on the ratcheting or the B rating ratcheting, which will happen on January.
We’ve got five months and we are preparing our complete action plan to make sure that there is no disruption or lease disruption that happens. Yes, when the happens, which is basically a two-star will become one star and a 1 star will become zero, there will be some price increase or a cost increase that will happen, it will get passed on to the consumers. So there is still four, five months as an industry because then the first time the star rating happened we went through a learning. I think those learnings will come handy. As we speak, we are preparing for the ratcheting and that just to clarify, that’s only in the ceiling part.
Nikhat Koor
Okay. Okay, sir. Thank you.
Operator
Thank you. The next question is from the line of Niraj Kambekar from Propestro Tree. Please go-ahead.
Unidentified Participant
Hello, sir. Am I audible? Hello.
Ravindra Singh Negi
Yeah, order book.
Unidentified Participant
Yeah, sir. So you mentioned that there is a flat demand in fans due to unseasonal rain. But at the same time, the new the number of new houses are billed is going up. So why our sales growth is low and was it because of more competition?
Ravindra Singh Negi
So Niraj, you have to understand, so there is different segments. There is a new house segment, which is a certain percentage of the industry sales that happens, then there is replacement, which is renovation lead replacement. That’s another percentage of the overall sales. And then there is a large upgrade stroke, our genuine requirements happening, that’s another segment. So some segments will continue to grow, could be triggered by the housing segment and all.
And in the housing segment, you also have to see how many houses have got up occupied because fans get used when the occupancy levels in the housing sector goes up. So that’s one factor. But otherwise, overall, some segments or some needs of the consumer will pull it up, there were some seasonal needs which brought it down. So there were multiple factors which impacted the industry.
Unidentified Participant
Okay now what steps we have taken to bring down the entity?
Ravindra Singh Negi
You know first and the foremost step that we took was make sure that we don’t add to it. We didn’t produce once we were very clear that the season is not looking like the way it was supposed and anticipated. We did carry a anticipating a good season. As we peak, there is inventory planning and production planning, which will make sure that in Q2, we normalize our inventory level.
Unidentified Participant
Okay. Thank you. Thank you, sir.
Ravindra Singh Negi
Thank you.
Operator
Thank you. Ladies and gentlemen, please limit to one question per participant and come back-in the queue for a follow-up.
The next question is from the line of Niransh Jain from BNP Paribas. Please go-ahead.
Nirransh Jain
Hi, sir, and thank you for the opportunity again. Sir, my question was more from a long-term perspective and specifically on the ad spend, you said that we continue to deliver that 4% to 5% of sales. So my question has been that we have seen the ad spend growing higher than the topline growth over the years.
And I think the idea has been that over the years, they should ideally be like drop-down as a percentage of sales as we start like as our brand gets more recognized and more customer acceptance. So how do you look at it in terms of keeping the absence at a higher-level to drive sales? So in that case are the able to cater to like to get to the double-digit margin will keep on taking questions.Just wanted your thoughts on this.,
Ravindra Singh Negi
Ransh, hi, thanks for this question. And I think while we look at double-digits, it’s an output. You have to look at what are the inputs that we’re wanting to trigger. And one of the inputs that we’ve been wanting to trigger is saying how do we have a balanced portfolio. How do we get some of our other categories to do much better than what they’re doing? And in that direction, lighting was one of the identified one and we are seeing the traction happening there.
Wanting to build a brand, which is a larger consumer-centric brand and not just fans only. And that’s where the marketing spends will go to build core categories of lighting fans and into some of the new categories that we’re pushing our efforts on. And once that happens, as a percentage, it will come down both in the B2B and B2C side, we will remain far more connected as a brand in the minds of the consumer.
Nirransh Jain
Sir, secondly, I wanted to also check, did we see any slowdown in the B2B license specifically in this quarter? And I was just wondering that we have seen double-digit growth in switchcare and then we do see also probably like a low-single digit growth. So in that case, I mean, we are seeing some moderation on a quarter-on-quarter basis on lighting and especially in the government cap itself who was on a higher side. So what explain this like quarter-on-quarter decline?And are we seeing any slowdown in the B2B for us?
Ravindra Singh Negi
There was some slowdown in some of the government infrastructure projects, but we see it as temporary. And I think as I said, there was this a temporary sentiment that went down or there was a little bit of hold during May when there was geopolitical tensions, but we do expect these to come back now.
Nirransh Jain
Sure, sir, that’s very helpful. Thank you and all the best.
Operator
Thank you very much.
Ravindra Singh Negi
Sorry, we’ll take one more question.
Operator
Thank you. The next question is from the line of Shiv Kumar Prajapati from Ambit Investment Advisors. Please go-ahead.
Shiv Kumar Prajapati
Yeah. Thanks for taking my question again. So I have a couple of questions. Are we exploring any export opportunities for our new product categories? Say and and cables or BLDC fans.
Ravindra Singh Negi
Yeah Shiv, yes, at least on the fan side, different categories, including markets where energy-efficient fans are there. As we speak, we do keep exploring markets and we’ll continue to do that. For wires, we are wanting to first build-up domestic capabilities and then we look at wires. Switchgear, obviously, we do export some bit and we continue to make our efforts to make sure that some of our switch gears get more traction on the export side.
Shiv Kumar Prajapati
Okay, got it, sir. And sir, how do we see Orient position evolving in the next three to five years? Is it as a multi-category volume player or as a high-margin premium brand player?
Ravindra Singh Negi
We’ve been very consistent in our narrative around the organization saying, we are wanting to be a consumer-centric brand which looks at solving consumer problems and premiumization is a — is a strategy that we’re building. We’ll have a well-balanced portfolio and the premiumization effort, which is yielding some results is giving us the confidence of moving towards the double-digit margin. Are we going to be a value-for-money volume brand? Definitely not.
Shiv Kumar Prajapati
Okay. And sir, given the emerging categories say wires or switchgear at a nascent stage, how do we prioritize our capex and the marketing spend across these verticals.
Ravindra Singh Negi
So right now, as I said, our marketing monies are now building two core categories, strengthening our fans category and all the efforts that we’re doing on the premiumization on the fan side and then building our lighting. While we do this, this has a one orient as a mother brand impact, which will have a trickle-down impact on the emerging categories.
So emerging categories will have a differentiated spends to be done, maybe at the retail visibility and at a due course when we start seeing volumes there, we will then take it at a larger level.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand over the conference to management for closing comments.
Ravindra Singh Negi
So thank you, everyone. Thank you for your questions. It keeps us on our toes and thank you for the encouragement. We look-forward for some revivals to happen and we are very optimistic given the fact that there is festive rebound that we hope to see. Thank you so much, Pari and Gawani for conducting this call. Have a good evening. Thank you so much.
Operator
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us. And now you may disconnect your lines