Orient Electric Ltd (NSE: ORIENTELEC) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Ravindra Singh Negi — Managing Director & Chief Executive Officer
Analysts:
Dhruv Jain — Analyst
Ravi Swaminathan — Analyst
Natasha Jain — Analyst
Aniruddha Joshi — Analyst
Rachna Kukreja — Analyst
Balasubramanian A — Analyst
Keshav Garg — Analyst
Nirransh Jain — Analyst
Umang Shah — Analyst
Disha — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Orient Electric Limited Q3 FY ’26 Results Call, hosted by Ambit Capital Private Limited. [Operator Instructions]
I now hand the conference over to Mr. Dhruv Jain from Ambit Capital Private Limited. Thank you, and over to you, sir.
Dhruv Jain — Analyst
Thank you. Hello, everyone. Welcome to Orient Electric’s 3Q FY ’26 Earnings Call. From the management side today, we have with us Mr. Ravindra Singh Negi, Managing Director and Chief Executive Officer; Mr. Arvind Vats, Chief Financial Officer; and Mr. Sambhav Jain, Head of Investor Relations. Thank you, and over to you, sir, for your opening remarks.
Ravindra Singh Negi — Managing Director & Chief Executive Officer
Thank you, Dhruv, and thank you, Iqra. Good evening, everyone, and thank you for joining us for the Orient Electric Q3 FY ’26 Earnings Conference Call. I appreciate your time and continued engagement with our journey of strengthening Orient into a more premium consumer-centric and future-ready FMEG brand. We’ve been interacting with a lot of you over the course of last six months, updating on our progress of our strategy in action.
Let me give you an overview, first, of the quarter three from an industry perspective. Quarter three unfolded against a dynamic macro background. The quarter began with healthy festive momentum with signs of resilience in the domestic environment, supported by steady GDP growth, improved liquidity and sustained consumer confidence, aided by GST rate realization across various categories. Even though OEMs and FMEG categories were not impacted by this, but Q3 started on a positive consumer sentiment towards discretionary spendings. However, elevated channel inventory and muted demand in cooling categories tempered the industry’s overall growth trajectory.
In parallel, the industry underwent a major regulatory transition from implementation of the ratcheting of new BEE Star Label norms for ceiling fans effective 1st January 2026. This triggered widespread channel destocking of older models, causing short-term trade dilution. Additionally, a sharp rise in copper prices and commodities added further cost pressures. Despite these disruptions, Orient Electric delivered resilient performance, recording 11% year-on-year revenue growth, driven by a consistent emphasis on portfolio diversification through a multi-product growth engine, anchored in consumer innovation, premiumization and disciplined execution under our One Orient strategy.
Orient navigated the seasonal softness well and delivered a standout performance in the ECD segment, with a revenue growth of 12.6% year-on-year and a strong 46.7% quarter-on-quarter increase. This growth was led by a strong double-digit growth in appliances, especially the heating category, underscoring its central role in our diversification strategy, balancing the seasonal dips in fans for our ECD segment. Prolonged and severe winters enabled significant market share gains in water heaters and room heaters, supported by the launch of our Whirlflow fast heating range and a successful extension of the Fatt se Garam campaign. In fans, we delivered decent single-digit growth, demonstrating resilience despite broader industry softness. Our premiumization playbook continued to gain traction, with BLDC portfolio growing by over 30% and, collectively, premium decorative and BLDC models now contribute to about 30% plus of our domestic ceiling fans mix.
Our Mission Orange retail program expanded to 4,500 new outlets, enhancing in-store product engagement of our premium portfolio and improving conversion. We also successfully transitioned and stabilized the Pune market to the DTM model. MP and Chhattisgarh transitioned previously to direct service, and it has now stabilized. We have further strengthened our service infrastructure by implementing four-hour service commitment in fans and water heaters across 18 major cities.
Another key growth engine, lighting and switchgear segment sustained its growth momentum with a 7.1% year-on-year increase in revenue. In the consumer lighting, we continue to strengthen our market share with a single-digit volume and value growth and a mix shifting towards luminaires, which rose to 66% contribution versus 61% last year, driven by COB downlights and panels. Premium lighting also grew in double-digits. However, tender business had a sharp one-time degrowth on the back of a higher base last year, leading to an overall flattish lighting revenue. Our brand campaign for lighting, One Brand Voice, featuring MS Dhoni and Kusha Kapila in the podcast format with the tagline, Fans wale Orient, lights bhi banate hain, has resonated strongly across both trade and consumer segments.
Our switchgear and wires business delivered well this quarter, wires doubled year-on-year, although on a very small base, supported by strong acceptance in trade and influencer ecosystems. Switches also posted high-double-digit growth, supported by sustained electrician engagement initiative and effective cross-selling through our fans, lighting distribution ecosystem. This segment, though currently at a low base, is a future growth segment for OEL.
E-commerce grew in high-double-digits, fueled by improved assortment, positive reviews and strong performance marketing push. With a substantial part of our marketing investments now directed towards digital and contextual platforms, we continue to sharpen our consumer-centric communication strategy. Exports also grew 40%, strengthening our diversified international footprint largely led by fans. Across businesses, we are increasing design differentiation, energy-efficient technologies, which are aesthetics, and category-leading user experience, building a premium brand imaging and driving visibility in trade and e-commerce.
Moving on to the financials, in Q3 FY ’26, Orient delivered a resilient performance, building on the strategic levers. Our revenue grew 11% year-on-year to INR906.5 crores, representing a robust sequential increase of 29% over Q2. This growth reflects our continued focus on market expansion and the success of our premiumization strategy across core and emerging categories. Gross profit for the quarter stood at about INR270.4 crores, up 4.3% year-on-year. Gross margin was at 29.8%, approximately 30%, slightly below our guidance of 32% to 34%, primarily due to elevated commodity prices, especially copper during the quarter. To mitigate this, we have implemented a 3% to 3.5% price increase in January across main categories of fans, lighting and switchgear. Wires has been passing on the impact of the commodity increase now almost every three weeks for last few months.
Despite margin pressures, I’m pleased to report that our operating EBITDA margin remained stable at 7.5%, supported by operating leverage and ongoing cost efficiency initiatives. PBT before the exceptional item was INR44 crores, up 19% year-on-year, reflecting strong underlying operational performance. PAT, however, was impacted by one-time statutory adjustment of INR8.7 crores related to implementation of the new labour codes. This exceptional item, while non-recurring in nature, temporarily weighed on reported profitability. Overall, Q3 results highlighted the resilience of our business model, diversified multi-growth engines and disciplined execution, positioning us well to sustain momentum in the quarters ahead.
Our focus remains clear, build a more premium, more digital, more efficient and more consumer-centric Orient, with category leadership in BLDC, luminaires, heating segment and build scale in B2B lighting, switchgears and wires. Looking ahead, we believe that the new BEE Star norms effective 1st January 2026 will act as a structural catalyst for accelerated BLDC adoption. With a strong and expanding energy-efficient portfolio, we are well positioned to benefit from this shift. Combined with the expansion of our DTM footprint, strengthening digital reach and disciplined execution across channels, we remain confident of finishing FY ’25-’26 on a better than industry note, with sustained growth, improved profitability and continued progress towards the future-ready operating model.
With these remarks, I would like to open the floor for your questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]
The first question is from the line of Ravi Swaminathan from Avendus Spark. Please go ahead.
Ravi Swaminathan
Hi, sir. Very good afternoon. Congrats on a good set of numbers. My first question is with respect to the fans industry. So, any flavor on what would have been the volume decline in nine months in the fans industry and how Orient would have performed during this period?
Ravindra Singh Negi
Ravi, thanks for the question, and thanks for the compliment on the good set of numbers. If I were to look at it, and I don’t have the final quarter three third-party report, but the volume degrowth — and there are two sets that we need to look at when we look at volume degrowth. Volume at the ceiling fans level is more or less sustained, but the degrowth largely has happened in the TPW segment from an industry perspective that we’re saying. If you look at our last three quarters results in YTD also, we’ve done better than industry, better than peers, we’ve gained market share. And that, if you do any channel check, would be very evident in the market.
Ravi Swaminathan
Understood, sir. And within fans itself, with respect to the BLDC fans, what is the share of BLDC in your overall portfolio? And you had, a while ago, mentioned that this BEE norm change would accelerate the shift towards BLDC. What is the key reason behind that happening?
Ravindra Singh Negi
So, if you were to look at — and if I were to look at my YTD, YTD almost at about 40% on the BLDC is what we’ve grown. This quarter also 30% we’ve grown. Industry sits at about 17%, 18% of BLDC of the ceiling fan. We are — for this quarter because, obviously, there was a one-time BEE ratcheting, and a lot of our eco and sub-segment sales happened, but overall, we are at almost one-fourth of my ceiling fan closer to one-fourth coming from BLDC. And that’s been a very — it fits in well with our premiumization strategy as well as from a consumer-optic perspective.
When I say the ratcheting, the ratcheting is making the norms tighter and hence consumers will be attracted to far more energy-efficient products. And it’s not just the energy-efficient product, it’s the blend of technology and design is what we are delivering, which is making our BLDC grow. That’s why we said, tighter the norms, the adoption of BLDC would be faster. In that segment, if you play a lifestyle design and a tech combination together, the chances for Orient gets far bigger and far higher than most of the other brands.
Ravi Swaminathan
Understood. And in terms of profitability of BLDC, we say, or the other products, is there a big difference in that, or is it like similar in terms of profitability at the gross and EBITDA level?
Ravindra Singh Negi
It’s higher. It’s higher.
Ravi Swaminathan
It’s higher. Okay. And final question with respect to fans once again, what would be the likely requirement of price increases that is needed to offset the commodity price going up? Like, copper prices have gone up and rupee also has depreciated. So, what would be the kind of price increase that will be required for that? And what would have been the price increase associated with just the BEE norm change alone?
Ravindra Singh Negi
So, we don’t — so, I would not share the breakup between the two. And it will all depend on brand to brand. A substantial part of my portfolio was already meeting the norms set by BEE, because we always focus on quality, and we try and give the best to the consumer. We’ve taken a 3% price increase on 1st of January. We’re keeping a very close watch on the commodities. If required, if the commodities stay at these elevated levels, we’ll revisit our need for another price increase.
Ravi Swaminathan
Understood, sir. And my last question is on the lighting…
Operator
Sorry to interrupt, Ravi. Please rejoin the queue for more questions.
Ravi Swaminathan
Sure.
Operator
Yeah. Thank you.
Ravindra Singh Negi
Thank you, Ravi.
Operator
[Operator Instructions] The next question is from the line of Natasha Jain from PhillipCapital. Please go ahead.
Natasha Jain
Thank you. Good evening, gentlemen, and congratulations on a good set of numbers. So, I have two questions. First, in terms of fans, so you mentioned in your opening remarks that elevated channel inventory and demand also has been tepid now given that there will be cost hike as well. Do you think that in 4Q, the industry growth could be moderated as a factor of all this, and any good trigger we could only see from FY ’27 onwards?
Ravindra Singh Negi
Natasha, thank you. See, you have to look at it, when I say elevated channel inventory, they’ve been destocking it. There was a — because of poor summers that happened. And we also have to keep in mind, where did the impact happen more, when there was a tapered summer. So, TPW and that’s what I said in the beginning to Ravi’s question, TPW got more impacted. Ceiling fans got lesser impacted. Now, the ratcheting has happened in ceiling fan and not in the TPW. Given the fact that this year Holi is slightly earlier, we are expecting and very hopeful for a strong summer. And if the strong summer starts to happen in South first, that kick starts the TPW first and then it goes on to the ceiling fans. So, very hopeful that quarter four, Feb onwards on, we should start seeing some traction here.
Natasha Jain
Understood, sir. That’s helpful. And my second question is in terms of lighting. Now when I see your top-line growth has been moderate, but margin decline has been sharper, and it is even sharper when I see it on — both on a Q-o-Q and Y-o-Y basis. So, is it mainly because of the front buying and now we are getting impacted more from costs or the pricing decline? And if so, can you call out what is the pricing decline in this quarter as well for lighting?
Ravindra Singh Negi
So, in lighting also, there are — so, when you look at the results, it’s a combination lighting, switchgear and wires, all put together. Wires, we were able to pass on the price increase literally every two, three weeks. Switchgear is where our price increase passed on to the consumer did not happen. It’s taken on 17th of January, 3% price. So, that has been an impact on overall. Lighting also went through a little bit of commodity impact. There also, we passed on the price increase on the 20th of January of 3%. So, we are hoping that the margins would come back.
And obviously, we have spent a little bit more on lighting from a branding perspective, trade engagement perspective, but and that’s largely our Q3 phenomena because that’s the time when lighting seasonality impact happens. We’re building up that category. We’ve taken the price increase and we’ve taken a price increase in fact, ahead of the industry. So, that should bring back the margins in the lighting and switchgear, wire segment.
Natasha Jain
Sir, what would be your B2B, B2C split in lighting?
Ravindra Singh Negi
Largely, I’ve given a guidance earlier also. It’s currently 75%, 25%. Ideally, we should move towards some of the industry leaders of 65%, 35%. So, we’re building our capabilities on B2B side more.
Natasha Jain
Got it. Thank you so much, sir, and all the very best.
Ravindra Singh Negi
Thank you, Natasha.
Operator
Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Aniruddha Joshi
Yeah. Thanks for the opportunity, and sir, congrats for great set of numbers given the macro conditions. Sir, two questions. One, now as per the new norms, even the star rating 2 can be only BLDC fan and means if somebody launches an induction fan, he cannot get star rating 2 also. So is that a fair understanding? So if that is the case, eventually, the entire industry may shift pretty fast to BLDC only. Is that one fair assumption?
Second question is now earlier, induction fans required a lot of commodities like copper and aluminum, whereas in case of BLDC, the major cost is PCBA Electronics, which is almost 50% of the cost. So, the increase in commodity prices will literally will not at all impact or will impact very negligible to BLDC fans. Again, is that a fair understanding? So I mean basically, the gap between BLDC and induction may reduce, and it may push for more premiumization, right?
Ravindra Singh Negi
Aniruddha, thanks, I think — let me just first address your first assumption of saying the star rated 2 will be BLDC. I think it’s a wrong assumption. What government has simply done is they have service values defined. And at a service value earlier was a 4.1% service value for defining as a 1 Star. Now they’ve made those service values go up. Government simply says, at this service value, whether you make it through an induction or a BLDC, if you’re delivering that service value, that star rating gets applied there. So, currently, theoretically, you can do a 5 star both on induction as well as on BLDC. So it’s a factor of service value and 2 star doesn’t mean BLDC. Typically, everybody is giving 5 star on BLDC. So you are able to bring the consumption to anything between 28 to 32 watts. So that’s one.
On the other factor of saying, yes, there is the commodity consumption that starts to happen very differently. But it’s PCB is not the 50% part of the overall costs, it is lesser than that, and there are different variable components of making a fan where there is an elevated price increase. So, we passed on — I wouldn’t say category to category, but it’s been far more secular when we pass on a 3% price increase. So, there’s a cost increase and impact, which happens across categories right now.
Aniruddha Joshi
And then, if the commodity prices increase, will it require same price hike in BLDC also or induction fans also?
Ravindra Singh Negi
No. So, ideally, it’ll require slightly more on induction than BLDC. But currently, given the price increase and everything, it’s impacting both sides.
Aniruddha Joshi
Okay. Okay, surely. Surely sir, understood. And just last — second question. It seems that we have gained market share in three months or nine months. So if you can indicate what would be the gain of market share? And if you can give more color like which region we would have gained, East, West, North, South or urban versus rural. Any details on that will be helpful. Also, if you can share the market shares in BLDC versus the inductions also. Yeah. Thanks.
Ravindra Singh Negi
So, typically, we don’t share market shares, and I’ll refrain from sharing that. But yes, there are third-party data, which is available to most of the people who subscribe to it, we’ve gained shares across different categories, different markets and different channels also. So, we track them separately. The reports that we have, third-party indicators. We don’t share the data. But we seem to be moving in the right direction on the market share gains. Difficult for me to even give you a region-wise, I hope that you’re satisfied.
Aniruddha Joshi
Sure, sir. Sure. Yeah. Thank you. Thank you, sir. Thank you.
Operator
Thank you. The next question is on the line of Rachna from SiMPL. Please go ahead.
Rachna Kukreja
Thank you. I have a few questions. Within the appliances in ECD, which has seen strong double-digit growth, did the heating category in Q3 FY ’26 grow at a rate of 20% year-on-year? Some color — quantitative color specifically on the heating category?
Ravindra Singh Negi
Our heating category has done extremely well, and that’s the qualitative number that I can give you. We don’t share subcategory wise, but when I look at appliances, given the fact that there’s been a good winter, especially in North and East, and there were parts of even South where heating category did grow well. So, we’ve seen a growth that’s happened. And water heaters as a category is something that we’re doubling down, we’ve got new models, we’ve expanded our distribution, we’ve expanded our channels, that’s showing a good traction as we speak.
Rachna Kukreja
Even if you could give a ballpark figure, is it grown higher than the ECD category or some range to give specifically color on the heating segment.
Ravindra Singh Negi
So, Rachna, we’ve grown ECD by 12.5%. And when I’m qualitative saying that we’ve done high-double-digit, you can understand that we’ve grown higher than the ECD overall.
Rachna Kukreja
Okay. Okay. My second question would be for nine months FY ’26, did switchgear and wires contribute more than 5%? And what could be the annual revenue run rate for switchgears and wires? And will the contribution grow in the long term? And if yes, what would be the labels?
Ravindra Singh Negi
So, we’ve called out earlier that the switchgears and wires is a growth engine for us. And that’s where there are tailwinds of infrastructure push and development by the government happening. Currently, it’s club. And obviously, it’s club because it’s less than 15% of the overall. As and when we put these two as different sections, we give you far more detail on switchgears and wires What are the right to win in these segments? Switchgears we’ve been doing. We have a good technology partnership. Our Eurotech is one of the better technology-backed switchgear available in the market. Switch is also gaining traction there.
And on wires, our country strategy has been saying, where is my channel synergies coming in. Just to give you a little data point, 40% of the — 40% to 45% of the fan selling dealers sell wires. So those are the channel synergies that we’re doing. Currently, we’re seeing as a percentage good growth. But as a value, we need to do a lot more given the opportunity and the size of the opportunity available. As and when it becomes substantial enough, we will share more details on switchgears and wires separately with all of you.
Rachna Kukreja
Okay. So is it fair to assume it is around 5% to 10% of our lighting business?
Ravindra Singh Negi
Rachna, we don’t give a breakdown of that. So I would refrain from answering. Thank you.
Rachna Kukreja
Okay. One data keeping question. Other expenses have decreased. Could you share which cost components have seen some control and whether it is likely to continue in the medium, long term as well? Same for depreciation as well, there has been a slight decline. So both on these cost components, if you could give some color?
Ravindra Singh Negi
So, firstly, a slight correction. Our Other expenses has not decreased. They’ve just gone up by about 2.4% up. There are a lot of cost initiatives that we’re taking, a lot of operating leverage that we’re trying to build in, in the organization, and we’ll continue to focus on this what is not controllable in our factors, these commodities and the headwinds of regulatory and other things that we did. What is controllable in our — with us is some of the structuring and cost and a huge focus on programs like Sanchay that we do with saved still YTD about INR43 crores for us. So those are something that will continue to happen for us. On depreciation, it’s hardly anything, it’s an accounting number that happened because of our investments earlier in now, so it’s not much there. Thank you, Rachna.
Rachna Kukreja
Okay. Thank you.
Operator
Thank you. The next question is from the line of Dhruv Jain from Ambit Capital Private Limited. Please go ahead.
Dhruv Jain
Thanks for the opportunity. Sir, I had two questions. First is, if you could just provide an update on the Hyderabad plant, as to what is the utilization. And from when should we start expecting some bit of gross margin expansion being driven from there?
Ravindra Singh Negi
Dhruv, thank you. On Hyderabad plant, as I said if you look at the nine months and you look at what has impacted the industry, it’s — the decline has been the TPW segment far more than the ceiling fans. Our Hyderabad plant is primarily built for TPW. And as I also said that February onwards, we see TPW bouncing back and we are very hopeful that this summer starting from South would be better than last year. And if you read a little bit about it, there is this whole El Nino which is building up again. So that should give us a little bit of more hope. As we speak utilization is low, this summer would be a full layer — for a full year for us to start leveraging the Hyderabad plant and that have the impact on our gross margins, obviously.
Dhruv Jain
Sure. And sir, second question linked to this on the margin side, right? So given how commodities have moved up, there has been the aspiration that you guys have had with respect to touching double-digit margins sooner. So, does that mean that we not see that number even in this year will get pushed out to FY ’28 or do you think that the price rises that you’re taking will be enough to kind of get you to that number, assuming you grow at double digits from a top line perspective in FY ’27?
Ravindra Singh Negi
So, Dhruv, a lot depends on the commodities. And our assumption is that commodities should start softening from February onwards. If it doesn’t happen, we will have to pass on the prices to the consumer, and that we’ll do. What helps us is that if you — for the last few quarters, we’ve been building a very strong portfolio and a focus on premiumization. You were slightly better off when the price increases happen because the consumer at that premium end is slightly more inelastic to the price movement and there. So, hopefully, that should help. We’re still maintaining, we’ll keep a close watch in Q4 and then only if there is any guidance on saying that if I have to shift my goalpost on double digit. I’ll come back to you. But we’re hopeful and we’re pushing to move towards the double-digit margin.
Dhruv Jain
And just one question quantitatively in this industry over the last four or five years has seen a fair bit of competitive intensity, right? So, in your mind is that competitive intensity across segments coming off or it’s still sort of the same as what we’ve seen in the past?
Ravindra Singh Negi
To me, I think the number of entrants has slowed down, but a number of existing players getting into different segments is increasing. I don’t know if you have a right to win and a synergy that you want to build up, each category that you do will have a value of debt. So, you could probably — if you get into fans, the value of this could be about INR200 crores, INR250 crores. Because post that, your distribution, your brand, your service, your premiumization and your consumer pull starts to kick in. So, to me, I don’t — I think the number of new entrants would be not increasing much but the existing players would then get into each other’s categories far more.
Dhruv Jain
Got it. Thanks a lot and all the best.
Ravindra Singh Negi
Thank you, Dhruv.
Operator
Thank you. [Operator Instructions] The next session is from the line of Balasubramanian from Arihant Capital. Please go ahead.
Balasubramanian A
Good evening sir. Thank you so much for the opportunity. Currently, premium fan mix contributes nearly 30% of domestic ceiling fans. And what is the target mix of FY ’27 and ’28? And how are you addressing affordability to drive further adoption?
Ravindra Singh Negi
Hi. Thank you. Thank you for the question. I had stated a couple of quarters back. For us, the ultimate target is to move this 30% to 45%, a huge amount of focus on BLDC, a huge amount of focus on getting the design language right when we fill finish and a complete go-to-market on selling the premium products is being worked upon. We strongly believe that it’s a traction that’s — that we are on the right path. 45% is what we aspire to be. We are quite a distance away, but that’s where we would be — we’ll have a milestone there.
Balasubramanian A
Okay, sir. So, on the export side, I think we have grown 40% year-on-year while many players are struggling on the export side because of the tariff issues. I just want to understand which regions are driving this kind of growth? And what is the scalability of the export business?
Ravindra Singh Negi
So, I’ll first tell you from an industry perspective, I don’t want to divulge my areas of where we sell. The industry sales largely the SAARC, Middle East and Africa. Those are the areas which are not impacted by tariffs as of now. So I think there is still a headway for the industry to keep growing in those markets.
Balasubramanian A
And my last question, DTM model, I think we have added…
Operator
Sorry to interrupt, Mr. Balasubramanian. Please rejoin the queue for more questions.
Balasubramanian A
Yeah. Okay, sir. Thank you. Thank you.
Operator
Thank you. The next question is from the line of Keshav Garg from CCIPL. Please go ahead.
Keshav Garg
Sir, firstly, our working capital days have increased from 18 days in FY ’24 to 31 days. And sir, also, are we on track to achieve 10% operating margins over the next six quarters that you had told us? And sir, also our stock price is at 2020 COVID levels, so. And our market cap is almost equal to our revenue. So and promoter holding is very low at 38% or so isn’t it an opportune time to do a share buyback to increase shareholder wealth?
Ravindra Singh Negi
Hi, Keshav. Firstly, I won’t comment on the stock and the valuation and all. That’s our purview of this call. Secondly, on the 10% guidance, I just answered on that. We remain optimistic about it, in spite and I said in the call that what is controllable, if commodities and regulatory is not controllable, there is this whole focus on getting our cost structures are operating leverage in, and we are working on that with the one name of getting on to the double-digit margins there. Yes, our stock prices have come down, but that’s a larger impact of what’s happening at a global level, what’s happening with FIIs, what’s happening with the small cap and overall investor sentiment. [Speech Overlap]
Keshav Garg
And sir, what about the working capital — yeah, sure, sir. Sir, I’m just saying we should make use of the attractive level of stock price to do a share buyback.
Ravindra Singh Negi
Thank you, point noted. Thanks for your suggestion on that. Working capital, which are largely at stock in the market, which leads to a receivable going up which is a person, but otherwise, there’s nothing there and which is also what we have building up. So there’s not much of a gap there.
Keshav Garg
Sir, so, what steady state working capital days are you expecting going forward?
Ravindra Singh Negi
We should be in the range of 18 to 20, 22, and that’s the number of days that we’ve always kept in.
Keshav Garg
Great, sir. Thank you very much and best of luck.
Ravindra Singh Negi
Okay. Thanks.
Operator
Thank you. The next question is from the line of Nirransh Jain from BNP Paribas. Please go ahead.
Nirransh Jain
Yeah. Hi, sir. Congratulations again on a really good set of results. Sir, my first question is again back to the inventory levels for the fans. So given that — like this year, anyway, the issue was higher on the TPW side and like based on our checks also the inventory levels had been like a little bit fair, especially for the ceiling fans. And like in your opening comments, you mentioned that there has been a further destocking that has happened on the older rating. So is it fair to assume that the inventory levels are even below than the normal level, especially for the ceiling fans? Or another way, like how do you see the current channel sentiment for the upcoming summer? Like, do you see them stocking up or like waiting for the summer recovery?
Ravindra Singh Negi
Nirransh, thank you for the question. So if you look at the split between the ceiling and TPW is about 70%-30%. Last year, if you recall the average temperatures in February, March 2025, were higher than even 2024. So a huge amount of pent-up demand pent-up built up for the summer has happened. And it starts first with the South and South contributes to almost 60%, 65% of the TPW. So huge amount of stock inventory has been built up happened for the industry in the South, which then again went through a very consistent crash in sales over the last nine months. So I think that’s where I was mentioning saying, look, the destocking happened from our overall ceiling fan perspective, the industry has been more or less flat on the volumes, but there’s been — I think there is because of the star ratcheting price increase.
There’s been a little bit of — towards the end of quarter for the industry, there’s been a little bit of positive sentiment that trade has shown in terms of this. A lot depends on how February turns out, with summers in South. Given the fact that Holi is early this time, it also is a positive indication for North and East also. So we’ve not got any negative sentiment from the trade as of now. And we’re very optimistic about the summer is turning out to be much better than last year. And if you look at over the last 10, 15-year results of any cooling category, there’s never been two years of bad summers, just a reference point.
Nirransh Jain
Sure, sir. And sir, is it possible to call out the advertisement and the sales promotions for the nine months YTD?
Ravindra Singh Negi
So, we are at about 4.2%, 4.1% of our revenue there. We’ve always maintained that since we are building up different categories, we will be higher than the industry, at this elevated level of about 4%, 4.5%.
Nirransh Jain
Right. And sir, actually, my question comes from the fact that if I look at last year also, the ad spends grew by like 8%. So we have already started seeing some deceleration in the ad spends. Now obviously, this comes as a broader strategy of like when the investments were front-loaded and now we are seeing some moderation in there. But my question is that next year, for example, if the demand again recovered, do we see these ad spends as a percentage of sales going back to those 4.5% levels? Or like how do you see the ad spends trajectory over the next one to two years?
Ravindra Singh Negi
This quarter, I was at 4.2% versus last year, have done a double-digit spend on my marketing spend. So, as I said, we will continue to invest because it’s not just one category. We’re building up a brand across different categories. So, we will see a slightly elevated levels. And next year also we intend to spend because that’s where when you’re building up a brand standing for multi-categories and premiumization, you will have to do. We will have to find the right and how are we getting the right results from those, are we picking the right channels. And that’s why I specify saying we’re picking up the right digital channels. We’re picking up right connected TVs, we’re picking up the right segments to go and talk about our brand and products.
Nirransh Jain
Right, sir. And sir, lastly, just one thing, are we thinking about any other category specifically related to solar or like is there any thoughts behind that?
Ravindra Singh Negi
Nirransh, as soon as we finalize anything, we’ll come back to you guys.
Nirransh Jain
Sure, sir. Thank you so much and all the best.
Ravindra Singh Negi
Thank you, Nirransh.
Operator
Thank you. [Operator Instructions] The next question is from the line of Umang Shah from Avendus. Please go ahead.
Umang Shah
Hi, sir. First of all, once again, congratulations. I know you are tired of hearing this, but sir, my question is more related towards our projections on premiumization. So that is one main reason why I think that we really love your brand. Orange has really worked very well. Brand exposure has worked very well. So going forward, what do you think would be the additions in the SKUs that we will be looking at. Fans and Lights, both if you could comment on that.
Ravindra Singh Negi
So, Umang, thanks, and thanks for bringing out the brand and the color and the fact that we really like the premiumization efforts that we’re doing. Premiumization, especially when you start thinking and keeping consumers at the core of it, it’s a long drawn process. We’ve been at it for a long time. As we move forward, for the summers also, you will see some of the innovation and premium products coming in both categories of lighting and in fans. And moving forward, we will also see in some of the other categories of heating that we will have. This is a continuous journey. Premiumization and innovation doesn’t stop at one innovation or a one product. You’ll have to keep understanding the consumer, keep solving for the consumer needs and work very hard.
Interestingly, your DNA has to become consumer-centric to be able to anticipate the trends, movements and do that. As simple as that last year, we picked up the trends and colors, we introduced about 40 colors which was very liked and appreciated by the consumers as well as specifiers. So, some of those things, it’s a continuous journey that we are at it and we’ll continue to do so.
Umang Shah
Okay. And sir, the other way, so what would be our DTM strategy now? Do we think that we have penetrated in the existing market and that we will start looking at different markets? Or we are still a long way to go for that?
Ravindra Singh Negi
No, we’ve always said that there’s always going to be a hybrid model of MD and BPM. What are we wanting and solving for? We are saying any market where I am growing, gaining market share, improving my quality of distribution, both in terms of numeric distribution and weightage, premiumization and engagement with the retailer. That’s a market we’ll continue to do whether and then the route and the model doesn’t matter. And we keep evaluating that. So, that still stands that we’ve always had. All the markets that we’ve done, we’ve seen a traction there in terms of all these parameters.
Umang Shah
Got it, sir. And sir, I missed in between, there were questions on water heaters, so heating and cooling products. What is our strategy over there? What do you think is the optimal season that we should be aware of in terms of seasonality for growth in revenue or something on that sort?
Ravindra Singh Negi
See, if you look at it in the last few years, the weather conditions and global warming is becoming extreme. Either it’s going to be extreme summer or it’s going to be extreme winters. The consumers will pick for both conditions, products, and we would want to be aggressive. We would want to have the same presence in both categories and solve for consumer needs from hard seasonal variances that we are seeing, whether it’s summer or it’s winters. And we’ve seen water heaters could get good traction and good response. We’ve seen room heaters getting a good response. And we are hopeful that we’ll build these categories more and gain market share there. There’s a headroom for us there in that category to gain market share as well as gain on the premiumization there.
Umang Shah
Perfect. Just to continue on the last point. So what would be the optimal mix that we will be very happy with? Currently, 65%, 30%. Where do we think in two years, three years down the line [Technical Issues] come back on ceiling fans versus lighting, what mix is the optimal mix for us?
Ravindra Singh Negi
Umang, sorry, I couldn’t get it, but I’m assuming you are asking what could be a B2C and a B2B mix in lighting, that would be an optimal mix.
Umang Shah
In our overall revenue, where we will be very happy that 50%-50% fans and other products.
Ravindra Singh Negi
So, for us, the mix is obviously any product in a byproduct. For us, the key thing is to see growth in my existing strong core categories, much better than the industry, much better than the peers. And from a newer categories are higher double-digit growth that we would want. So, we’d want to see ideally both the mix is a fallout and end result of that. Our key purpose is to have a secular growth across all categories, driving all categories being seen as a consumer-centric premium brand across all the SKUs that we do across all categories that we do for the consumer. Mix is a resultant.
Umang Shah
Okay. Got it. Very clear. Very clear, sir. Great. Thank you so much. Thank you.
Ravindra Singh Negi
Thank you, Umang.
Disha
Thank you. [Operator Instructions] The next question is from the line of Disha from Sapphire Capital. Please go ahead. Hello?
Operator
Yes, we can hear you. Please go ahead.
Disha
Yeah. So, my question is just on the BLDC side. I think currently, we’re around 50%, right? And you mentioned that we are targeting to get this up to 45%. So what’s the time line there?
Ravindra Singh Negi
So, Disha, I said, BLDC, we’ve grown by 30% on the premium, which is a mix of BLDC, decorative and non-BLDC premium. We’re currently at our greater than 30%. That’s where we’re looking at 45%. Obviously, we want to do it as soon as possible, maybe next couple of years.
Disha
But any sort of any timeline?
Ravindra Singh Negi
Take two seasons.
Disha
Okay. And what’s this margin differential that we see how like because this is on the premium side? So, what’s the differential for the margin?
Ravindra Singh Negi
So, we don’t declare that because that’s internal data, but it’s better on BLDC and premium. And that’s what most categories, if you look at it, you don’t call any category or SKU premium if it’s not delivering a better margin than the average or the entry level.
Disha
Right. Okay. Okay. That’s it from my side. Thank you.
Ravindra Singh Negi
Thank you, Disha.
Operator
Thank you. Ladies and gentlemen, we’ll take this as the last question for today. I now hand the conference over to Mr. Dhruv Jain for closing comments. Over to you, sir. Dhruv, sir, is not connected right now. We can close the call.
Ravindra Singh Negi
Yeah. So, thank you, everyone, and thank you for your time and for all the encouragement and the questions, which — and looking forward, we are very hopeful for a good summers and a good Q4. Thank you so much for the time. Thank you. Have a good day.
Operator
[Operator Closing Remarks]