Digitally Empowered: Rakesh Khanna, CEO & MD, Orient Electric
Reputed as a sharp business strategist with a hands-on approach and an eye for detail, Rakesh Khanna has been instrumental in the growth of Orient Electric since joining as its CEO in 2015. A versatile professional with strong financial acumen and deep insight of the Indian and UAE markets, Khanna has managed brand leaders like Sony, Jumbo, Hitachi, Wipro and Eureka Forbes in his earlier stints.
A mechanical engineering graduate of the Thapar Institute and a postgraduate in management studies from University of Mumbai, Khanna has a consistent track record of achieving business turnaround and building sustainable high profitability business models.
Business Growth
Orient Electric is the largest manufacturer and exporter of fans in India with presence in over 40 international markets. It is also the second largest manufacturer of LED bulbs in India and the first Indian lighting brand to have been awarded BEE star rating for LED bulbs, the company claims.
With operations spread across more than 35 countries, Orient Electric, a part of the $2.4-billion diversified C.K. Birla Group, has earned the trust of millions of customers by providing cutting-edge lifestyle electrical products. The company has fully integrated manufacturing facilities in Kolkata, Faridabad and Noida. In the domestic market, it has a well-organised distribution network made up of 1,25,000 retail outlets as well as a strong service network covering more than 450 cities.
Khanna described FY22 as a year that was marked by uncertainty and wavering toplines. "I am delighted to report that Orient Electric grew its revenue by 20.5 per cent, operational EBITDA by 5.4 per cent, and profit after tax (PAT) by 6.2 per cent in FY22. Almost all our business segments saw healthy traction resuming, leading up to a point where FY23 began to look quite encouraging," Khanna said in his address to the shareholders.
Durables Dominate
Orient Electronics operates in consumer durables, lighting and switchgear products. In 2021-22, its revenue from operations was Rs 2,448 crore. It has two segments, Electrical Consumer Durables (ECD), which contributed 73 per cent of its revenue in FY22, while the rest 27 per cent came from the Lighting and Switchgear (L&S) segment.
In FY22, the ECD segment performed commendably despite facing many headwinds, including raw material inflationary pressures, muted demand and consumption slowdowns caused by Covid. For the year ended 31st March 2022, the ECD segment posted revenues of Rs 1,799 crore, up 18.9 per cent YoY, and an EBIT of Rs 201 crore.
Under Khanna's leadership and in line with Orient Electric’s long-term goals, the company persisted to expand its geographical reach by further widening and fortifying its distribution network, especially in southern India.
The company also integrated its various digital initiatives into its overall distribution framework, which further raised its efficiency in inventory management, logistics and service levels.
In an investor call, Khanna described the revival in demand in FY22. “As lockdowns receded and vaccinations permuted, people’s lives started to return to normal gradually. As a result, customer sentiments improved and we experienced encouraging revival for the demand for electrical durables,” he said. “We believe that, for now, the worst is past behind us, and the future looks more optimistic for Orient Electric,” he added
