PG Electroplast gains 6% on solid quarterly earnings, growth guidance

PG Electroplast: Avestha Fund Management LLP buys 1.42 lakh shares in PG Electroplast. Avestha Fund Management LLP acquired 1.42 lakh equity shares in the company via open market transactions. These shares were bought at an average price of Rs 1,046.79 per share.

Shares of PG Electroplast surged as much as 6 percent on January 7 as investors cheered the strong quarterly numbers.

At 12:33pm, shares of the company were trading 4 percent higher at Rs 1,172.35 on the BSE.

The stock has given stellar returns in the past one year. In the past one year, the scrip has risen 56 percent and has shot up 1,657 percent in the past three years.

The company’s net sales came in at Rs 457.89 crore in the December quarter, up 74.77 percent from Rs 262.00 crore a year ago, while net profit stood at Rs 13.74 crore in the reporting quarter, up 148.03 percent from Rs 5.54 crore in the corresponding period last year.

Its operating margin expanded to 7.76 percent in the December quarter from 5.84 percent in the previous quarter and 6.57 percent a year ago. This was largely because of lower raw material costs, cost control and operating leverage.

Due to sharp successful scale-ups across all business segments, PG Electroplast has increased its sales guidance to at least Rs 2,000 crore which is a growth of 82 percent over FY22.

The company’s Managing Director Vikas Gupta, told CNBC-TV18 in an interaction that potentially revenue for FY24 could be in the range of Rs 2,500-3,000 crore.

Gupta also added that PG Electroplast is looking at a significant growth in its product business, from Rs 1,200 to Rs 1,500 crore, in FY24.

The company has grown over four times in six years from a revenue of Rs 263 crore in 2015-16 to Rs 1,098 crore in 2021-22 at a 27 percent compounded annually with the EBITDA (earnings before interest, tax, depreciation and amortisation) increasing at 28 percent compounded annually. Over the past six years, the company has done a cumulative capital expenditure of close to Rs 400 crore.

The company specialises in Original Design Manufacturing (ODM), Original Equipment Manufacturing (OEM) and Plastic Injection Molding, catering to more than 50 leading Indian and global brands.