BENGALURU (Reuters) – Appliances maker Orient Electric on Thursday reported a 48% fall in its fourth-quarter profit as higher expenses offset demand.
Driven by inflation, consumer goods makers have resorted to offering deals and discounts to attract consumers affected by rising prices, thereby impacting their profit margins.
New Delhi-based Orient reported a net profit of 128 million rupees ($1.5 million) for the three months ended March 31, compared with 246.2 million rupees a year earlier.
Orient Electric, which also sells fully automatic coffee machines, hand mixers and switchgears, said its revenue from operations rose 19.7% to 7.88 billion rupees.
Total expenses rose 23.3% year-on-year to 7.79 billion rupees, dragged by a 55% jump in employee costs and a near 24% rise in purchase of traded goods.
Despite strong sales of fans from November 2023 to mid-February 2024, the subsequent sales have been tepid for the company.
Revenue in its business that makes ceiling fans and air coolers was rose 24.4% year-on-year.
Rival Havells India posted a higher quarterly profit on strong demand for room ACs and fans.
Shares of Orient Electric closed lower at 7.3% after the results. They fell 14.9% in the March quarter.
($1 = 83.4954 Indian rupees)
(Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Nivedita Bhattacharjee)
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