Geojit Financial Services research report on PG Electroplast
PG Electroplast Ltd (PGEL), the flagship entity of PG Group is a leading electronic manufacturing service provider in India, having a diverse portfolio and panIndia presence. In Q1FY26, PGEL reported a revenue growth of ~14% YoY, which is in line with our estimates. However, air conditioner sales faced significant headwinds due to the early onset of the monsoon, which disrupted the seasonal volumes. EBITDA margin declined by 183bps YoY to 8.1% due to negative operating leverage and input cost pressure. The company expects FY26 margin to decline by 1.25-1.5% YoY due to pricing pressure and higher channel inventory. PGEL expects inventory to be cleared in H2FY26 as the seasonal demand picks up. Washing machine sales were robust during the quarter, reported a growth of 36% YoY. PGEL expects the segment to grow 40-45% YoY in FY26. We expect the management’s focus to diversify to other business verticals like refrigerator, EV and compressor manufacturing to keep the longterm story intact.
Outlook
The stock is currently trading at its 3-year average 1-year forward P/E of 42x, and we expect most of the negatives are factored into the price. We therefore revise our rating to BUY with a downwardly revised TP of Rs 623, based on a P/E of 40x on FY27E EPS.
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