POSITIONAL TRADING : ORIENT ELECTRIC SHARE PRICE

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Welcome back to one more interesting article which is related to Orient Electric share price.

So, the stock for today is Orient Electric limited.

Now let’s see the business of this company and their footprint.

BUSINESS ANALYSIS

Orient Electric limited (OEL) is an Indian multinational electrical equipment manufacturer based in New Delhi and part of CK Birla Group.

Orient Electric ltd was a subsidiary of Orient paper Industries Ltd.

The company is primarily engaged in manufacture/purchase and sale of Electrical consumer durable and lighting and switchgear products.

It also operates in three industry clusters-Technology and Automotive, Home and Building,& Health care and Education.

Orient Electric Limited (OEL) does more than 60% share in exports for fans and is the largest manufacturer in this segment.

It has also forayed into segments such as water heater, switchgear, lighting, among others making new avenues of growth.

Now, coming to the financials of the company.

FINANCIAL ANALYSIS 

The Market Capitalization of Orient Electric ltd is Rs 6583Cr.

The price to earnings ratio of the stock is 54.9 which is higher than the industry price to earnings ratio of 47.8.

The company has a great return on capital employed of 35.5% which indicates that there is a bright future ahead and a great growth curve.

The return on equity is 29.4% which is pretty awesome as per the stock’s valuation.

The company has a debt to equity ratio of 0.13 which is manageable by the company and can repay the debt whenever they wish to with the help of net cash flow.

The company has been maintaining a healthy dividend of 32.37%.

It has also shown an excellent profit growth of 52.2% which predicts the bright future of the company.

From the last 4 quarters (Jun 2020, Sep 2020, Dec 2020, Mar 2021) the sales are increasing constantly from Rs 179 Cr to Rs 802 Cr.

The operating profit was -19 Cr in June 2020 quarter due to Covid pandemic, but it has drastically increased to Rs 97 Cr in the March 2021 quarter.

The net profit from the last 3 quarters (Sep 2020, Dec 2020, Mar 2021) has increased from Rs 32 Cr to Rs 63 Cr.

The earning per share value is Rs 2.95.

Every year, the expenses of the company have reduced which shows that the company is focusing on generating more profits.

The share capital of Orient Electric has been the same from the last 4 years.

In the year 2021,the reserve had increased to Rs 434 Cr from Rs 338 Cr in the year 2020.

The net cash flow of the company has also increased to Rs 133 Cr in the year 2021.

Promoters have a holding of 38.52% till March 2021.

The Flls have a 9.23% holding.

The Dlls have a 22.57% holding while only 29.68% is with the public.

Promoter holding is less which is a risk for this company.

Financials clearly state that Orient Electric limited have their superb presence in their segment and our leader in their respective market.

Now let’s deep dive into the technical aspect of the stock.

TECHNICAL ANALYSIS

If we take a closer look at the chart in a daily timeframe, we can see that there is a cup and handle pattern formation.

A breakout is yet to be achieved but with the excellent financials the resistance levels would definitely be tested in a short span of time.

A target of approximately 20% can be seen to be achieved.

The Orient Electric share price on 14^th July 2021 is Rs. 310 which would definitely vary in the upcoming future.

The high price of the stock in the last 1 year was Rs 345.

Chart pattern is under formation which is evident from the image shown above.

DISCLAIMER:

This analysis is only for study purposes. Prices do change daily so there’ll be a change in chart pattern. We don’t promote to buy or sell stocks based on this analysis. Our intention is just to share the information related to the stock.

Image source: tradingview.com