PG Electroplast Q1 Results Review - Superlative Quarter; FY25 Guidance Revised Upwards: Systematix

Systematix Research Report

PG Electroplast Ltd.’s strong Q1 (revenue/Ebitda/profit after tax up 95%/99%/151% YoY; 9.9% Ebitda margin) was driven by Product segment (revenue up 125% YoY driven by 130% YoY surge in room AC following harsh summer season; 75% mix).

After strong Q1, management has revised upward its FY25 guidance (revenue up 33% YoY at Rs 36.5 billion, group revenue up 55% at Rs 42.5 billion including Rs 6 billion revenue from Jaina joint venture, Product revenue up 59% YoY at Rs 26.5 billion; PAT excluding JV share up 58% at Rs 2.16 billion).

Order book is standing strong; a Rs 3.8 billion capex will be on 2 greenfield plants in Rajasthan and Noida, and expansion at Supa. On management’s upward revised guidance, we raise our revenue/PAT estimates by 11%/9% and 11%/8% for FY25 and FY26, respectively.

We now expect 26%/26%/41% CAGR in revenue/Ebitda /PAT over FY24-26E with an improved return on invested capital of 22% in FY26E and further scope of improvement.

While we remain positive on PG Electroplast’s prospect, after two times return in the scrip in last two months and currently at 40 times FY26E P/E, we maintain Hold with a higher target price of Rs 462 (45 times FY26E P/E; earlier Rs 381 at 40 times).

Seasonal nature of RAC business poses risk on our high growth expectation.

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