Orient Electric Ltd (NSE: ORIENTELEC) Q4 2025 Earnings Call dated Apr. 25, 2025
Corporate Participants:
Ravindra Singh Negi — Managing Director and Chief Executive Officer
Sambhav Jain — Head of Investor Relations
Analysts:
Natasha Jain — Analyst
Dhruv Jain — Analyst
Keshav Lahoti — Analyst
Praveen Sahay — Analyst
Achal Lohade — Analyst
Neeraj Jain — Analyst
Arshia Khosla — Analyst
Rahul Gajare — Analyst
Unidentified Participant
Rajat Setiya — Analyst
Manoj Gori — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Orient Electrics Limited Q4 and FY ’25 Earnings Conference Call hosted by PhillipCapital. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Natasha Jain from PhillipCapital. Thank you, and over to you, ma’am.
Natasha Jain — Analyst
Thank you,, and hello, everyone. I’m Natasha Jain on behalf of PhillipCapital, welcome all of you to Orient Electric’s 4Q FY ’25 earnings call. From the management today, we have Mr Ravindra, Managing Director and Chief Executive Officer; Mr Arvind, Chief Financial Officer; and Mr Samrav Jain, Head of Investor Relations. I would now request the management to give their opening remarks, post which we shall open the floor for Q&A. Thank you, and over to you, sir.
Ravindra Singh Negi — Managing Director and Chief Executive Officer
Thank you. Thank, everyone. Thank you, Natasha, and thank you, Manus. Good evening, everyone. We are delighted to welcome you all to Orient Electric’s Q4 and financial year ’25 earnings conference call. Thank you for taking the time-out to join us today. We hope you’ve had the opportunity to review our financial results and earnings presentation, which are available on the stock exchanges and our company website. As we reflect on industry’s performance for the quarter-four, it is very evident that this quarter was shaped by unique challenges and opportunities that came across segments. A mild winter, prolonged — though prolonged impacted demand for heating products and delayed summers impacted pre-season sales for highly penetrated fans category for the industry.
The same trend was not observed for underpenetrated categories like coolers with pre-filling of channels seen in anticipation of a strong summer. March, however, recorded a better exit trend, particularly for summer products like PAM with channel filling currently underway for most brands across the industry.
Moreover, the quarter experienced fluctuations in key commodities such as copper and aluminum with prices rising through February and March. However, it is softening now, but very much unpredictable given the current tariff wars. Pricing headwinds for the industry persisted across most categories, compressing margins, except for cables and wire segment. Despite these headwinds, I’m glad to share that the quarter marked continued progress for Orient in strengthening our top-line as well as bottom-line and delivering on our strategic moves.
Our strategy in action delivered impactful results across our focus areas. Premiumization, which is the cornerstone of our growth strategy was strengthened by initiatives across product lines. Significant progress has been achieved with new launches in fans, expanding the contribution of BLDC and driving premiumization in B2C lighting with innovative value-add products contributing greater than 60%. Products like CUBs, panels, town lighters, magnetic tracks, they are the ones which are helping us grow the value business in B2C lighting. BLDC has grown over 50% year-on-year this quarter and over 30% on a full-year basis, with our overall NPDs in fans category now contributing almost 20%.
Efforts to establish a premium range in water heaters have further enhanced our portfolio. Our efforts on premiumization remain instrumental in sustaining our gross margin. Our retail visibility initiatives, Mission Orange and Project Spotlight have enhanced our touch and field presence of premium products in-stores, reinforcing our position. We are increasingly balancing our portfolio as a key driver for sustained long-term growth. Our focus on expanding lighting and other emerging categories is demonstrating results with lighting emerging as the fastest-growing segment in our portfolio.
Lighting has emerged as a strong portfolio balancer with — with impressive strides in our B2B and tender business, helping us achieve industry-leading growth with market-share gains in B2C. Our B2C lighting business has registered a high double-digit volume growth for the year. We have successfully delivered marquee projects in the B2B lighting segment with an even stronger pipeline of orders resulting in our B2B business growing by over 20% on a full-year basis.
Our efforts on the switch care category, highlighted by the launch of Universal Switch further strengthens our product portfolio. Our wire business is also picking-up steadily this quarter with channel inventory normalization, infra-led pickup and new launches., our brand positioning continues to emphasize on customer-first approach. Our latest campaign for fans uses a fresh podcast-style storytelling format featuring MS and popular influencers Kapilla and for a range of BLDC fans.
Our initiatives on e-commerce and quick commerce with strong partnerships with Blenkit and Zepto are continuously gaining traction of key consumer-led channels with our sell-out focus and market-share gains. A standout initiative for this season is our partnership with Zepto for a 10-minute delivery, accompanied by a collab, which is Hawake, Zeptoge, effectively demonstrating our digital-first approach.
On the distribution front, our direct-to-market efforts in sales and service continues to expand contributing to the revenue growth. We have expanded our DTM coverage in Kolkata, thereby completing our full presence in West Bengal and taking our total DTM sales to 11 as we speak by end of Q4. Our revenues from DTM sales grew high double-digit for this quarter and for the full-year.
We have also expanded our direct service network in Delhi in Q4. We continue to explore and expand our direct presence both in sales and service wherever we see the right opportunity. All these initiatives enable us to be much closer to the consumer and hence serving them better.
Our final and most crucial pillar is the continued strengthening of our organizational capabilities. Over the last year, we’ve taken significant steps in this direction, including key leadership appointments. We welcomed our new CFO, Arvind, following the retirement of Sable, our ex-CFO; and Tapas Roy joins us as the Head of Switchears and Wires business, bringing a focused approach to capability building and operational scale-up. We are also proud to be recognized among India’s top-50 Best Workplaces in manufacturing, large category by Great Place to Work. Being recertified, a great place to work for the sixth time in a row is a testament to our enduring commitment to people and talent development.
Project Sanjay underscores Orient’s commitment to operational excellence and sustainable profitability. The program cuts across all functions, fostering disciplined execution and cross-functional collaboration to unlock significant cost-efficiency. This has helped us in witnessing a cost-saving of INR75 crores for the financial year ’25. Operations in Hyderabad has scaled-up and have strengthened our capabilities and market presence.
We are now getting 50% of our PPW fan production from Hyderabad, improving our manufacturing scale and efficiency. With these pillars in action, I’m pleased to present our financial performance for the quarter-four and financial year ’25. We concluded quarter-four with a revenue of INR862 crores, reflecting a 9.4% year-on-year increase and a 5.5% sequential growth.
For the full-year, our top-line reached INR3,094 crores, demonstrating a robust 10% growth compared to the previous year. This is the second consecutive year of double-digit growth for us. Our lighting and Switchgear segment continued to deliver an accelerated pace of growth driven by strong momentum in both B2C and B2B space. Revenue for quarter-four FY ’25 reached INR248 crores, making a significant 13.3% year-on-year increase. This growth was driven by an industry-leading growth in lighting segment.
Within lighting, our consumer lighting business registered high double-digit growth in volumes along with better volume to value growth trajectory. The momentum in B2B remained strong with double-digit growth in Q4, Switchgears registered a robust high double-digit growth with new NPDs focused on needs and expansion of retail networks, while wires registered high double-digit growth with channel restocking and demand pickup from insalid activity. We remain confident in our ability to drive long-term growth in this business going-forward.
However, we need to do more to make a meaningful impact in the segment. Turning to our ECD segment, we saw continued momentum in Q4 with revenues rising to INR614 crores, up 7.9% year-on-year and almost 10%, which is 9.6% for the financial year ’25. Fan witnessed a single-digit growth despite a muted start to the quarter with channel selling for the summers in March ’25 only.
NPDs continue to be a focus area in fans with innovation and premiumization driving growth in the segment. Our BLDC range of fans have registered over 50% growth versus last year. Air coolers saw a robust growth of almost 33% in Q4 and about 37% for the full-year basis. With innovation and consumer centricity at core, we are confident of a stronger growth across our ECD portfolio in the coming quarters, especially given the Hyderabad facility is now fully geared up for the coming years.
Our gross margins have shown stability, consistently sustaining the range of 31% to 33%, reflecting the outcome of our strategic priorities, including premiumization, channel reorganization and an optimized product mix. Our gross margin for this quarter improved by 67 basis-points to 31.4%.
Our EBITDA margin was at 7.8%, an improvement of 385 basis-points. Consequently, our EBITDA for the quarter was higher at about INR67 crores, up 117% year-on-year. With our strategic pillars in-place, we are confident these margins are poised to improve even further with increased efficiency and operating leverage in the years to come.
Our PAT for the quarter and the financial year was at INR32 were at INR32 crores and INR84 crores, up 125% and 9% year-on-year respectively, showcasing our ability to translate all our actions into bottom-line much strongly. With our commitment to financial prudence, our working capital days stood at 26 degrees as on March 26 days as on March 31st March. As we look-ahead, we remain confident in the opportunities across our products, product segments and are committed to navigating any challenges with agility, innovation and excellence.
Our continued emphasis on premiumization, portfolio expansion, youthful and digital-first approach and distribution strategies will drive our long-term growth trajectory, keeping consumers at the core of our heart and strategy. We are confident that in the next seven to eight quarters, we will be closer to our aspiration of double-digit margins.
With this, I would like to open the call for questions. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star via touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
We have our first question from the line of Dhruv Jain from Ambit Capital. Please go-ahead.
Dhruv Jain
Hi, sir. Thanks for the opportunity. Sir, the first question I had was that in your presentation, you mentioned you’ve added about 4,200 retailers on the fan side. I just wanted to understand how much more room is left in terms of your retail expansion, which could continue to drive market-share gains or growth for you just through this distribution expansion initiative.
Ravindra Singh Negi
Thank you,, for the question. And yes, the first point that I would say is that this is driving distribution and direct distribution is a key priority for us. As we speak, we would have through our MDs and our direct DTM markets, closer to what, 50,000 to 50,000 to 55,000 retailers who would do direct and then there are indirect the retail presence that we have closer to about 80,000 to 85,000.
I think given the opportunity and the size and the industry size of, say, about 1,30,000 odd unique retailers in fans business, our emphasis would be to keep expanding this and that to us is a way forward. And part of that is also going direct in most of the markets that we’ve gone there. Our numeric distribution has improved and obviously with that the weighted distribution also improves.
Dhruv Jain
Got it, sir. And sir, the second question I had was that obviously, over the last two quarters, we’ve seen a more sustained margin improvement from Orient side, which is a great thing. But if you look at it from a three or four-year sort of trajectory, we are still far away from the peak profitability that Orient has delivered.
So just wanted to understand from you that over the next three or four years, is the organization sort of in-place to double its profit over the next, say, three to four years or is there some more work that’s required and more investments that would require? If you could just spell out some of the things that you’re trying to do and if it’s a realistic assumption that this doubling of profits can happen?
Ravindra Singh Negi
There are two things. One, I’ve spelled out in my conversation in the opening remarks as well as in our what are the strategic pillars that we’re doing? Just to summarize how is the brand going to look at, what’s the premiumization that we’re doing? How are we doing a portfolio balancing? It’s not just fans which are driving the top-line for us or our bottom-line, it’s the lighting which has come in.
And then the emerging segment of switchgears and wires, which over the next two, three years, we will build capabilities and build scale there also. In terms of margins, yes, we’ve seen an improvement coming in. We’ve also — I’ve also input in my opening remarks that in next seven to eight quarters, we do see all our efforts, all our operating leverage to start flowing in and we should be able to touch double-digits, which would keep us at par with some of the better players in the industry.
And thereon from there we’ll grow. As far as the next three to four years plan is concerned, yes, it’s in the process of getting a sign-off from the right Board and everyone. We will come back to you on this. But yes, double-digit is something that we are looking at the next seven to double-digit EBIT percentage is what we are looking at seven to eight quarters. And we believe with all these actions with complete focus on our cost, we’ve made the right investments in the organizational structure. We’ve made the right investments.
We’ve made the right investments in Hyderabad. We should be able to look at seven to eight quarters to start delivering consistently on double-digit?
Dhruv Jain
Thank you. And sir, just one last question on the accounting side. Over the last — in this quarter, we’ve seen a Y-o-Y decline of about 10% in the other expenses. I just wanted to understand if there was something one-off in the base quarter or is it — if you could just tell some of that out, what’s led to that?
Ravindra Singh Negi
And sir, last year we had an EPR taken into that quarter. So that’s the base effect that you would have seen. So that’s not a full and you look at it from a full-year basis, EPR then gets normalized and a little bit of impact also. But negating that also, we’ve degrown, we’ve had a better control on our cost, even if I negate those.
Dhruv Jain
Okay. Thank you so much, sir, and all the best.
Ravindra Singh Negi
Thank you,.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to take questions from all participants in the conference, please limit your questions to only two per participant. Should you have a follow-up question, we request you to rejoin the queue. We have our next question from the line of Kesha Lahoti from HDFC Securities. Please go-ahead.
Keshav Lahoti
Hi, thank you for the opportunity. Sir, I know you have discussed it possibly I’d like to hear more in detail the seven-eight quarter double-digit margin target which you have in mind. So what sort of improvement, which segment improvement you are looking for? Is it pricing led, cost-led? So what is in your mind because we are talking a big 300, 400 kind of bps improvement.
Ravindra Singh Negi
Yeah, Keshav, thanks for the question. And I would just again reflect back and step-back and just do a recap of all the opening remarks that I’ve made. These are strategic pillars that we are focusing on. Premiumization, which gets me a mix better, which helps me move-up the value chain where the pricing headwinds have a lesser impact and the consumer conversation is not on pricing, but on features and then price is always a discovery there.
That’s one part. The second part is that how are we building up our portfolio and that portfolio balancing is through — driven through our lighting, which is better contribution margins and better gross margins, building up premiumization in fans and then looking at categories of switches and switch gears to start giving us more than what they are contributing as of now. So these what we are building up actions to strategically drive that.
Then again, I said when some of the distribution-led actions that we’ll do, which is closer to the consumer go-direct wherever possible, those are strategy and action that will also start is yielding results that will continue to give us more benefit. From the operational excellence side, the project Sanche also helps us keep a very tight watch on opportunities to improve our margins. Those are things that will do. Whatever capex and other things that we had to spend on Hyderabad it’s done the next couple of years, Hyderabad and its efficiencies will start delivering to the bottom-line. These couple of fraction points, driven by our strategy-driven by our efforts in the market, which is — and we’ve had a double two consecutive years of double-digit growth. We are very confident in the next seven to eight quarters, we will touch the double-digit EBIT margins.
Keshav Lahoti
Understood. Got it. So the lighting, what industry-leading growth you are delivering, should we expect it to continue? And in your view, what would be the sort of industry growth and how much you have sort of gained market-share.
Ravindra Singh Negi
We’ve moved our market-share by almost 200 basis-points whatever reports and listed players in lighting have you given their results. The lighting industry as per se is flattish or degrowing. Our efforts to find the right segments and here, it is a clear classical case of premiumization helping us drive volume and value both. And obviously a little bit of base effect on our B2B side, which is also helping. So those put together, I think we’ll continue to gain momentum in lighting, which is where we are going to make the right spends on the brand and right allocations of resources..
Keshav Lahoti
Understood. One last question from my side. Is it fair to assume your writing sizes have bottomed-out?
Operator
Please request you to rejoin the queue.
Keshav Lahoti
Sure.
Operator
Thank you. Ladies and gentlemen, a gentle reminder, please restrict yourself to only two questions per participant. The next question is from the line of Raveen Sahai from PL Capital. Please go-ahead.
Praveen Sahay
Yeah, thank you for the opportunity. My first question is related to the ECD. As I can see that your premium portfolio in the fan or if I look at BLDC portfolio contribution is continuously increasing. Even after increasing in the premium category or the BLDC, our growth rate is for single-digit. So if you can give some color on how is the volume or the realization improvement you had observed? That is my first question. Second question is related to the lighting. And lighting in the B2C category, you still mentioned that the price is still is one of the concern. So how — what’s your outlook related to the B2C lighting pricing the way forward when sir, this price correction will stop or will see the improvement there? These are the two questions. Thank you.
Ravindra Singh Negi
Good Praveen, let me just take the first question on fans. I think you pointed out that fans is a single-digit growth. Yes, it is a single-digit growth. Last year, our ECD, you said is a single-digit growth. Last year, our ECB grew by about 24%. On that base, we’ve grown by almost 8% on that, two years CAGR of about 16%. Yes, we would have done more.
There are two large impacts that I would put, not only for us, but also I’m sure it will be true for the industry also. As I said in my opening remarks, there were prolonged weak winters. So neither did it help on the heating category nor did it help in the cooling category for a highly penetrated category like fans. We saw the exit trends of March much better with the anticipation of a stronger summer, the trade buildup and the channel buildup started happening in March of — which I think for — in-quarter one, we are very hopeful and very confident that start giving us a better, better traction there. So that’s on the ECD. And I think all our efforts on premiumization, we are holding on and improving on margins. If you look at our overall gross margins, they are improving.
Our segment results also if you look at it, we’re kind of maintaining there. So that’s on the margin side also. Anything on the light — and on the lighting side, you said pricing, yes, the pricing headwinds have been there in the lighting industry for last, I would say, seven, eight quarters. There are compliances and regulatory changes that has happened effective 1st of April. One big change is the ROHS compliance, which has increased the cost and hopefully, I think the industry will pass it on to the consumers.
We should see some sense of semblance coming on the pricing from that perspective and passing on these costs to the consumers. Having said that, you know, we’ve been able to navigate our volume value indexing and our traction much better. We hope to continue doing that.
Praveen Sahay
Thank you, sir. And all the best.
Ravindra Singh Negi
Thank you, Prud.
Operator
Thank you. We have our next question from the line of Natasha Jain from PhillipCapital. Please go-ahead.
Natasha Jain
Yeah. Thank you for the opportunity, sir. Sir, I was on-the-ground channel checks and I must say that the company’s traction has slowly improved. So congratulations for that. However, a feedback that I have received is, of the product when it’s dispatched from the Orient warehouse to the — to the dealer or the distributor, the timeframe is longer compared to peers, especially in your DTM markets where you have removed the master distributor.
So I want to understand what are we doing there in terms of working on the turnaround time and also are we building a relationship with the distributors now because they told me that they do not have the same relationship with the company management rather than the master distributor. So first question is that.
Ravindra Singh Negi
So, thanks for the feedback. And what I’ll ask is, I’ll ask to take the details from you. We have — how we operate is wherever we go on DTM, we do extensive setup of our warehouses, our logistics, our — if there is a particular market that you pick this up or multiple markets, I’ll take — I’ll ask to take that feedback from you and we will look into it. Which is slightly — I’ve also — and I do extensive market visits, which I have not it up, but I take your feedback, we will look into it.
And from a our construct all the way we’ve done our logistics mapping, it doesn’t seem to be there, but happy to take feedback from you on that. As far as relationship is concerned, I think it’s a very longstanding relation as an organization, as a brand that we do. Wherever we do a DTM also, we do invest on meeting the channel, spending time with them. A clear case of this was in-quarter four in February, we had taken about 250 channel partners and some of them had their own families with us in a conference outside of India and we did spend time building relations and this was for both MD as well as BTM markets.
So we do end-up is spending a lot of time building up relations as well as a feed forward feedback mechanism with them. I take your feedback. We will have — and there’s always a scope of improvement. I’ll ask to take the details from you, Natasha, and we’ll be happy to correct it.
Natasha Jain
Thank you so much, sir. Sir, my second question is on the US tariff. So are you getting any inquiries from the US, they were large-format retailers in terms of appliance, sourcing, manufacturing in India from your Hyderabad plant.
Ravindra Singh Negi
Little too early and as and when if there is something that substantially come up, we’ll be happy to share.
Natasha Jain
Great. And sir, one last shop question. You mentioned in your opening remarks that you’ve started a 10-minute delivery from. So I wanted to understand how does this work? I mean, does the electrician come immediately or what is the turnaround time in terms of installation? Is it quick or do they still have to wait for 24 hours like a general trade?
Ravindra Singh Negi
So, I think what happens is that when we — when consumers don’t buy a fan from the retail offline, online, not every fan comes with installation. Only the premium and that’s part of our premium strategy also would be the premium fans come with installation from the company. It’s a free installation that we give.
What we’ve done is a quicker turnaround minute delivery on, which means as the product gets delivered, typically as the consumer behaviors, they will use their neighborhood to come and install. Wherever we promise a free installation, we have a turnaround time of 24 hours. In summers in some of the top cities, we squeeze that turnaround time to eight hours to make sure that we go and deliver it, install it. But most of the non-premium products or fans, the consumer uses the neighborhood electrician to get it installed. But the product is getting delivered from a lot of dark stores of Zepto in 10 minutes
Natasha Jain
Thank you, sir. And all the very best.
Ravindra Singh Negi
Thank you,, sir.
Operator
Thank you. A reminder to all participants, please restrict yourself to only one question per participant. We have our next question from the line of Achal from Nuvama Institutional Equities. Please go-ahead.
Achal Lohade
Yeah, good evening, sir. Thank you for the opportunity. Sir, just wanted to understand in terms of the fans, if you could help us in terms of the market-share, what has been the growth for the year for the industry and for us? And what kind of market-share gains have we seen in the fans category.
Ravindra Singh Negi
So we’ve shared our numbers with you. We’ve seen almost 10% growth in the ECD and is also in a similar range. Our market-share is a third-party data that comes in, we’ve held on to our market-share and gained a little bit across some of the DTM markets that we’ve done. These are numbers that we don’t share openly, but I’ll have some get-in touch with you, I challen share specifics that you need to know about the market shares?
Achal Lohade
Sure. And just a second question with respect to fans premium mix, how is it for the industry? And for us, I presume you have talked about BLEC substantial growth, but just from an overall premium portfolio perspective, what is the mix for us and for the industry, if you could give some sense on that?
Ravindra Singh Negi
Yeah. So if you look at industry, industry would be slightly lower than mid-teens as VLDC as a percentage of overall ceiling fans. I’ve shared that we’ve almost touched 20%. So we are higher than the industry on that. We’ve made our port — we’ve strengthened our portfolio in VLDC. We’ve seen 50% year-on-year growth this quarter.
Overall, we’ve seen 30% growth. We are ahead of the industry in terms of, you know, our contribution to overall seami from BLDC. Premium, the industry would be somewhere around, 20% 21% or closer to 20%. We are at about 30% plus on premium contributing to it. Our aspiration is to take it to 40% and above in the next few years.
Achal Lohade
Got it. I’ll fall-back in the queue for more questions, sir. Thank you so much.
Operator
Thank you. We have our next question from the line of Niraj Jain from BNP Paribas. Please go-ahead.
Neeraj Jain
Yeah, hi, sir. Thank you for the opportunity. So sir, my first question is on the underlying demand trends. I mean, we understand that the primary filling happened for fans a bit late during like late of March. But how the underlying secondary demand has been for us, especially, for example, in South region where the summer would have started much earlier, probably around mid of Feb. So we have seen like two months kind of a summer already played out. So how has the demand picked-up so-far? And what are we seeing in the North Region as well?
Ravindra Singh Negi
So, I’ll just give you a larger perspective from an industry this thing and take it from an industry viewpoint and not necessarily Orient because I would not want to share my secondary movements in trends across the categories, across regions. But largely if you look at it and we’ve not had — the industry has not had a clear run of 15 days or 20 days of strong summers anywhere across the country, okay. Even if you look at it, South, went up, went down first 10 15 days of April, rains there, north started up, few rains, patches of rain.
But now as we see for the last seven days and if you look at going-forward for the next two, three weeks, the prediction — IMD prediction is very strong — is there for a very strong summers and we’ve seen the temperatures go up. I’m very optimistic that you know — and it takes a continued seven days of good harsh heat to start being off to go up 1, 1.5 times, two times across the market. So we are very optimistic that the summers will pick-up across the country. So right now, North is there, parts of south for the industries come back on secondaries, there’s West, which is already seeing secondaries movement up in the last seven days and that’s from a larger industry perspective that I’ve shared.
Obviously, we have our own mechanism to track our secondaries. We are very optimistic about quarter one and build-up on that.
Neeraj Jain
Sure, sir. Thank you. That’s very helpful. My second question is on the gross margin side. So I think Orient is one of the few companies that have already reached like pre-COVID levels. So what are the further levers like I understand that premiumization is our main key focus area, but we have also guided that it should broadly remain in the similar range. So now since we are targeting like 350 bps kind of improvement over next two years. Are we expecting it from anything from the gross margin also or will it be a pure operating leverage that we are hoping for?
Ravindra Singh Negi
So I think on the gross margin, I think what we’ve said is a range of 31% to 33% and why you know any improvement further would have multiple factors to take care of. One is the stability of commodities and at what fluctuations do we see. If there is stable, I think I’m sure if you get a quarter or two of stable commodity prices, you will see gross margins go up. What we are very confident that with what you build-up in terms of — in terms of a brand, your portfolio, your distribution, your ability to then pass-on any fluctuations of commodity to the consumer is much higher, much stronger. So from that gross margin perspective, we — we are right now in that range of 31% to 33%.
I would love to be on the higher side of that range consistently. But a lot more would depend on the commodities and fluctuations. As far as the EBITDA or EBIT percentage is concerned, yes, it will have to be a mix of slight improvements in the gross margin, a lot more operational efficiencies that we bring in, a lot more rigor in our program and with the top-line growing, we will have the operating leverage, which will start slowing down to our EBIT percentages.
Neeraj Jain
Sure, sir. I have more questions. I’ll fall-back in the queue. Thank you.
Ravindra Singh Negi
Thanks very much
Operator
Thank you. And we have our next question from the line of Ashiya from Nirmal Bang Institutional Equities. Please go-ahead.
Arshia Khosla
Hi, sir. Thank you for taking my question. Sir, I just want to understand the mix between — I mean the category mix between switchgear and lighting. I mean the segment would be lighting heavy as such as in the again.
Ravindra Singh Negi
So, we don’t — so we’ve clubbed these categories and we don’t share it, but it’s intuitively right, it’s lighting heavy. And we are building up the switch gears and wires categories will take time. These are the segments where we feel that our future growth can come in from. But right now, we’ve not shared and we don’t share the split in that. But in, you’re right, it’s lighting.
Arshia Khosla
Okay. That’s helpful. And, I just want to understand the capacity utilization for our factory this quarter.
Operator
In the queue?
Ravindra Singh Negi
So I’ll take that question. We’ve built-up capacities right now, as I said on PPW, we’re getting 50% of our requirement coming in from — of our production coming in from Hyderabad. We’ve built-in a capacity which can — which is a — which was a 40% announcement from our existing capacity. We have — and we keep looking at the demand in our stock levels as and when required, we can scale-up there. Right now, we are very comfortable with what is getting produced at Hyderabad, which is now almost 50% of coming from Hyderabad and 50% are coming from Kolkata.
Arshia Khosla
Thank you.
Ravindra Singh Negi
Thank you,.
Operator
Thank you. Ladies and gentlemen, a gentle reminder, please restrict yourself to only one question per participant. Should you have a follow-up question, we request you to rejoin the queue. We have our next question from the line of Rahul Gajari from Haitong Securities. Please go-ahead.
Rahul Gajare
Yeah, hi, good evening. I just had one question. We understand that BLDC fans earlier had seen a sizable share of sales, which developed effects due to quality electronics or low-quality of magnets are used in the manufacturing process. So my question is, firstly, if this was true for OEMs and if yes, how that effects have reduced over the years for your BLDC portfolio. And if you could comment on competition also as far as BLDC or exercises?
Ravindra Singh Negi
Thank you. Of Rahul, good interesting question and I think that I would say is a very consumer-focused question and I would take it from that consumer perspective and from an industry perspective first. I think whenever you adopt a technology, you go through a learning curve. And I think as an industry, we all went through. Fans typically are electrical and we’ve had a very basic induction motor over the years. This is the first time that you’ve put electronics in electricals. And I think that’s the learning curve that the entire industry went through. Capability wasn’t there five years back.
There was only one odd brand which was working on it, but the capability over the last four, five years in terms of sourcing, getting the right electronics, getting the right PCBs, getting the right software of getting it rightly placed in the, that’s over the period of time has developed much, much, much better. Obviously, for the industry, the complaint trends, I’m sure has come down. But if I were to look at how is Orient handled it, we went back to our drawing board and I said what is that the consumer requires, how do we work on that? And what is that you bring in very smartly to electricals and you seamlessly get electronics into it.
A part of our capability that we had in our Noida plant of lighting was to make our own PCBs. We’ve partnered with our own — we partnered with engineering colleges, we had bits, working with us and we developed the right kind of a PCB, right structure of PCB, worked on the right software and we now almost 75% of our PCBs put in our fans are from our own factory in Noida, which is helping us, A, monitor closely, watch the quality of PCB that gets in. The second thing that we’ve also done is improve the manufacturing process.
It requires far bit better environment, far bit process adherence, which we’ve done in our plants, both in Hyderabad as well as in. The third thing that we’ve also done is that it requires intensive training to our service teams and to our technicians, which over the last few years we’ve done. Overall, all these have helped us improve our much, much better-quality product, product which we are giving to the consumers. And I think that’s the feedback that we’re getting from the market and that’s the track which is helping us get the right traction in the BLDC segment.
So I hope that addresses your query on the BLDC.
Rahul Gajare
Thanks. Thank you. That’s very helpful.
Ravindra Singh Negi
Thank you all.
Operator
Thank you, we have our next question from the line of Manish Jaint from Wealthcare Securities. Please go-ahead.
Unidentified Participant
Yeah, thank you for the opportunity, sir. Sir, my question was regarding the demand for the coating projects. Sir, lately we have seen the visibility of particularly the air coolers of Orient a lot. And in the opening remarks, you have told that it is underpainted category. So is it — the demand is even sluggish for the air coolers as you like fats or air-to-air coolers, have you done something different, sir?
Ravindra Singh Negi
So I said coolers as a category in comparison to fans as a category, fans is highly penetrated. You look at it about 95% household penetration in the fans versus coolers would be in a late 20s penetration. That’s the distinction that I did. Highly penetrated category in the Q4 because of delayed summers or a moderate weak but a prolonged winter didn’t help the stocking up of fans, whereas underpenetrated or slightly lower penetrated categories like coolers, where the stocking happens in anticipation of a harsh summers, that happens. So we had a 30% growth, 33% growth in coolers in-quarter four. So that’s how we had spoken about.
Unidentified Participant
Sir, and what about the demand for the products, sir, has it gained some market-share from the organized and unorganized sector in the air coolers?
Ravindra Singh Negi
Yeah, we are seeing a traction. The entire industry is growing here and obviously the organized sector is doing much better. At some point, organized, unorganized was almost 50-50. We’re seeing organized sector growing, but it is still a slightly not a very large industry. So it’s about INR3,000 odd crores only. So that’s where we are.
Unidentified Participant
And specifically about the demand, I think in the last eight, 10 days, there has been a pickup in the demand, whatever I have heard from the channel. Is it right or it is still sluggish?
Ravindra Singh Negi
For the last seven, eight days and I think some of this is, as I said and I was replying to, I think, Rahul on, no. I think I was replying to someone on the summers and how it takes seven, eight days of consistent heat to start seeing the demand go up for the industry. Yes, in the last seven, eight days, parts of North, North in fact across West and parts of South have seen consistent heat and even in East. So it’s picking-up across for the categories.
Unidentified Participant
Thank you for the opportunity, sir. Best of luck.
Ravindra Singh Negi
Thank you very much. Thank.
Operator
Thank you. We have our next question from the line of Rajat Setia from iThought PMS. Please go-ahead.
Rajat Setiya
Hi, thanks for the opportunity. Sir, my question is about the cost-saving program that we have. What exactly is the methodology here when we — when we calculate the number? Is it like there was some cost that happened last year and INR75 crore out of those costs did not happen this year or is it something else? And secondly related to this is, is it all opex or this cost-saving also includes something — some component of raw-material as well?
Ravindra Singh Negi
So what I’ll do, Rajat, it’s a slightly longer answer. And I think given the fact that we are constrained for time on this, I will have give you all the details, but largely just to give you the thing, it is multiple actions that happens, both how do you renegotiate the raw-material, what is the VAV actions that you’re doing, what’s the product differentiation that you get, what’s the process improvement that you get? You’ve got different stages of it.
Stage one is where the ideation happens, Stage 2 is where the filtration happens. Stage 3 is where we start putting in Stage 4 is when we start accruing the benefit. So it’s a very scientific long-drawn process that we have of Sanjay. We’ll be happy to take you through and Sambab will take you through this slightly longer, but it is a very structured process that is helping us there and we’ll be happy to share more details. Has noted down and Rajat, he will be in touch with you on that.
Rajat Setiya
Sure. So I think my email ID would be new database, so I’ll wait to hear from you guys.
Ravindra Singh Negi
Yes, yes.
Rajat Setiya
Thank you so much.
Ravindra Singh Negi
Thank you.
Operator
Thank you. We have our next question from the line of Manoj Gori from Equirus. Please go-ahead.
Manoj Gori
Yeah, thanks for the opportunity. Sir, I just need clarity on the revenue side. So if I look at the Q4 commentary, you highlighted like in the states where we have done BPM restructuring, the growth has been around high double-digit. So if I adjust it, does it mean like the states with traditional distribution model like there the pressure has been very significant on the revenues. So help me understand this, please.
Ravindra Singh Negi
Okay, I wanted to thanks for asking this question. When we say double-digit, obviously we pick-up states where there is growth opportunity and potential that we see, case in point of West, which we did over two quarters. And obviously, while all of you have asked questions and saying why is ECD not grown, one of the factors that we did make a choice of going through a transition in-quarter three and quarter-four with West Bengal. And obviously, when you do a transition, you do end-up losing a little bit of revenues, top-line and momentum and then you gain it back. When we look at these growth patterns and other things, these states that we’ve taken 11 states, they were growing much slower.
And hence, when we put this up, the growth rate starts to come in much sharper and much higher there. Rest of the states, they are in-line with the industry. We do keep a very close watch on the market shares for rest of the states, which are run by our master distributors. And we take corrective actions in terms of supporting doing things, right things on-the-ground to make sure that we keep gaining and we keep improving our market shares and growth rates there. Right.
Manoj Gori
So second part of the — on the top-line, if you look at you just — correct me if I’m wrong, you just highlighted like 20% of the fans is BLDC fans. Now when I look at that portion growing by roughly around 50% plus TPW fans now coming from the Hyderabad facility, but just want to understand probably how the core fans are doing. So just to — I don’t want to get into the numbers of each category or sub-segments, but especially on the fan side because when I look at the numbers, it seems like the traditional fans are not — there seems to be some pressure over there.
Ravindra Singh Negi
One clarification that you must keep in mind, when I get 20%, that’s ceiling fans. Ceiling fans for the industry is at about 70% of the overall fans. So it’s not the overall fans, which is 20% coming from BLDC, because BLDC is in the ceiling fan category, large penetration. In the TPW, there are experiments happening with a BLDC because TPW is slightly price conscious, I won’t say price-sensitive, but this 20% for us of the 70% for the industry. So that’s how I would put it up. The second is you got to put a lens of consumer and say what is the consumer wanting and at what price points.
So today, 2,500 plus price point, there are BLDC options available. And below 2,500, there are no BLDC options. Obviously, some brands are discounting and giving maybe if I were to put it saying not so great quality BLDC, but those two segments behave very differently. And hence the lower you go below 2,500, those are pricing pressures and headwinds of pricing that you see. Above 2,500, this is where the BLDC starts to come in and the consumer has a choice of making a decision on either design, which is lifestyle, functionality or tech. And sometimes the consumers make a choice of tech only or makes a choice of tech plus design plus functionality.
And that’s where we’ve seen the traction happening. That’s where we’re seeing the growth happening and this is from a large industry perspective that I’m saying. I hope that gives you a little bit of no, sorry, gives you the context to it. Natasha, do we have the next question?
Operator
Hello, yes, sir. The next question is from the line [Technical Issues]please go-ahead. [Technical Issues]
Ravindra Singh Negi
We are not able to hear [Technical Issues]
Unidentified Participant
Thanks for the opportunity. Just a quick clarification on DLDT side, sir. And roughly 20% of our total fan revenue comes from this fan. If you can share the rough absolute number from the context of if today it’s X amount, how much of this could be in next two to three years? And also from a margin point-of-view, does this fan offer better margin versus the conventional fan? And then I have one more on this appear only.
Ravindra Singh Negi
So, first thing, yes, you know, when you go up the value chain, whether it’s a BLDC or a induction, you get better margins. 2,500 price point and above, BLDC is starting to gain traction and we are participating, as I said, as a part of our core strategy is to be consumer first and we’re giving all the options to consumers choose from. The second part of your — the first part of your question was about saying, can we give you details of how much value and other things coming from, which we don’t share on calls. But I hope that clarifies on which we really see.
Unidentified Participant
So the 20% revenue-share of which you have today, what is the next two, three years, how much this can be?
Ravindra Singh Negi
So a lot will also depend on a lot of external environments, how — and the government is going through a lot of ratcheting and other things, which is where how the B and the norms of E will change. My take is that 2000 and above, you will see faster adoption and traction for BLDC or a 5-star fan. Tomorrow there is a technology and BLDC is a technology, but it is a — it is delivering what to the consumer is delivering a five-star fan to a consumer. If there is tomorrow a technology or another motor which delivers five-star. I think the adoption of the need of a consumer is to have a fan which consumes less power.
My take is that it should continue to grow 2,000 and above, 2.500 and-or above would go up to almost 50%, 60% coming from BLDC only or more. Our task is to be ahead of the industry, ahead of the industry curve and keep gaining what the consumer wants.
Unidentified Participant
Interesting, sir. And last on this, as the traction and penetration of BNDC is improving and after I think if I understand it correctly, after very, very long period of time, there is something which is meaningfully from a tech point-of-view meaningfully changing in the fan industry. So from a consumer point-of-view, from a brand percession point-of-view, earlier, there were brand leaders and they had a very good mind share of the consumers. But now because of the tech changes do you think that it’s an opportunity for a smaller or a challenger to you know to you know get a better brand share of the consumer and you can enter and challenge the dominating — dominating guys which were dominating for last many years. This could be a turning point for a player to challenge it and of NP in the market.
Ravindra Singh Negi
I think of Naushar, I would say that tech will keep changing, will keep evolving. Today we are talking BLDC. We got to see what is the end result that the consumer is looking. Consumer is looking, I need to save energy. That is a mean to deliver. And I think it will keep changing, it will keep happening for whether you’re a brand which is a well-established amongst the top two, three brands or you’re a new entrant, you have to keep consumer at the core of what you do. You have to be nimble, you have to be fast enough to look at opportunities to evaluate tech and adopt them. I think as an industry, all of us have done that. As Orient as a brand, we are doing it.
And we will not restrict ourselves to BLDC only. We will keep evaluating and looking at what’s the consumer wanting and what’s the tech opportunities and options available and adopt and deploy that?
Unidentified Participant
And what’s helping you here to grow faster than industry in this category?
Ravindra Singh Negi
Okay. I’m not sure that I think we will give us an opportunity for others also, but yes, there are a lot of things that we’re doing in terms of premiumization. There is a strong brand pool that Orientra brings in and a trust over the years that consumers have with us with lot of other things that we do, which is helping us gain much more than. And obviously, we give a better-quality and I spoke about our effort in getting the right BLDCPC delivered to the consumer.
Unidentified Participant
Sure. So all the way. Thank you.
Operator
Thank you. Yes, sir. This will be the last question, ladies and gentlemen. And I would now like to hand the conference over to Ms Jain from PhillipCapital for closing remarks. Over to you, ma’am.
Natasha Jain
Thank you. Thank you, Manav. I would now request the management to give closing remarks with any.
Ravindra Singh Negi
Thank you, everyone. Thank you for your time and all those questions. There are a couple of questions and a couple of data points on which Sambhav will get-in touch. But happy to take your feedback. Thank you for your interactions and all the best. Thank you.
Sambhav Jain
Thank you.
Natasha Jain
Thank you. That concludes the conference.
Operator
Thank you. On behalf of PhillipCapital, that concludes the conference. Thank you for joining us and you may now disconnect your lines.