PGEL - PG Electroplast

📊 NSE: PGEL 🏢 Electronics - Components 📅 Last Updated: 12/14/2025 10:59

💰 Financial Performance

Revenue Growth by Segment

Consolidated sales grew 77% in FY25 to INR 4,870 Cr. FY26 guidance projects 17-19% growth for PGEL (INR 5,700-5,800 Cr) and 56-57% growth for Goodworth Electronics JV (INR 850 Cr). Segment-wise, Products (RAC, WM, Coolers) are expected to grow 17-21% to INR 4,140-4,280 Cr, while Electronics is projected to grow 29% to INR 450 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company operates 11 manufacturing facilities across Greater Noida (UP), Roorkee (Uttarakhand), Bhiwadi (Rajasthan), and Ahmednagar (Maharashtra), with a new campus planned for South India.

Profitability Margins

PAT margins improved from 4.9% in FY24 to 5.91% in FY25. FY26 net profit guidance is INR 300-310 Cr, representing a 3-7% growth over FY25's INR 291 Cr. Q2 FY26 PAT was significantly lower at INR 2.4 Cr due to lower operating leverage and an INR 8.4 Cr forex loss.

EBITDA Margin

Q2 FY26 EBITDA stood at INR 45 Cr. Operating margins are described as moderate and susceptible to low utilization during weak seasons, as seen in H1 FY2026 where revenue growth moderated to 8.4% YoY.

Capital Expenditure

Planned capex of INR 700-750 Cr for FY2026 and INR 300-350 Cr for FY2027. This includes new campuses in South India (Refrigerators), Greater Noida (Washing Machines), West India (AC expansion in Supa), and Rajasthan (Plastic components and coolers).

Credit Rating & Borrowing

ICRA maintains a 'Stable' outlook, while CRISIL has a 'Negative' outlook due to margin pressure and stretched working capital. Gearing is healthy at 0.1x with interest coverage of 5.0x to 5.84x. Total Debt/OPBDITA is expected to remain below 1.0x.

⚙️ Operational Drivers

Raw Materials

Key raw materials include aluminum foil, copper tubes, compressors, motors, and electronic chips. Imports account for 45-50% of total raw material requirements.

Import Sources

Raw materials are primarily imported from China, Vietnam, and Thailand.

Capacity Expansion

Currently operates 11 manufacturing facilities. Planned expansions include a Refrigerator campus in South India, a Washing Machine campus in Greater Noida, expanded AC capacity in Supa (West India), and a facility for plastic components/coolers in Rajasthan.

Raw Material Costs

Raw material costs are exposed to 45-50% import dependency, making margins sensitive to commodity price volatility and forex fluctuations. Risks are partly mitigated by forward-contract hedging and periodic price revisions with customers.

Manufacturing Efficiency

Fixed asset turnover remains healthy at over 5x on a trailing 12-month basis. Return on Capital Employed (ROCE) stands at 20.8%.

📈 Strategic Growth

Expected Growth Rate

17-19%

Growth Strategy

Growth will be driven by a massive INR 700-750 Cr capex plan to enter the Refrigerator segment in South India, expand Washing Machine capacity in Greater Noida, and scale the Goodworth Electronics JV (projected 56% growth). The company is also focusing on increasing its share in the customer outsourcing wallet and leveraging PLI schemes.

Products & Services

Room Air Conditioners (RAC), semi-automatic washing machines, air coolers, refrigerators, plastic injection moulded components, and printed circuit board assemblies (PCBA).

Brand Portfolio

PGEL operates as an ODM/OEM for 70+ leading brands including Godrej, Whirlpool, Blue Star, and Voltas.

New Products/Services

Entry into the Refrigerator segment with a dedicated campus in South India and expanded offerings in focus segments like plastic components for automotive and sanitaryware.

Market Expansion

Targeting geographic expansion into South India for refrigerators and West India for expanded AC capacity.

Market Share & Ranking

Leading domestic ODM for Room Air Conditioners and semi-automatic washing machines in India.

Strategic Alliances

Goodworth Electronics is a 50-50 Joint Venture between PG Electroplast and Jaina India.

🌍 External Factors

Industry Trends

The Indian RAC market is estimated at 10-13 million units. There is a growing trend toward contract manufacturing (ODM/OEM) as brands prefer outsourcing to specialized players like PGEL to improve capital efficiency.

Competitive Landscape

Faces intense competition in the consumer electronics and plastic moulding segments from other domestic and international contract manufacturers.

Competitive Moat

Moat is built on integrated operations (backward integration into components), a wide customer base of 70+ brands, and the ability to provide one-stop solutions from design to final testing. This is sustainable due to high capital requirements for similar scale.

Macro Economic Sensitivity

Highly sensitive to consumer demand and festive sales. GST rate cuts on appliances are noted as a potential positive driver for demand.

Consumer Behavior

Demand is driven by increasing penetration of cooling solutions and festive season purchasing patterns.

Geopolitical Risks

Trade barriers or disruptions in China, Vietnam, or Thailand could impact the 45-50% of raw materials sourced from these regions.

⚖️ Regulatory & Governance

Industry Regulations

Operations are supported by the Production-Linked Incentive (PLI) scheme for white goods and electronic components.

Taxation Policy Impact

The company benefits from state-level schemes and potential GST rate cuts on consumer durables.

Legal Contingencies

The Board lacked the required number of Independent Directors for a period of 49 days in 2024 (August 11 to September 29) following a director's cessation. No specific court case values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Seasonality in the RAC business (60% of revenue) and high import dependence (45-50%) are the primary uncertainties, with potential margin impacts of 1-2% during volatile periods.