PGELNSENovember 17, 2025

PG Electroplast Limited

7,405words
118turns
12analyst exchanges
4executives
Management on call
Vishal Gupta
MANAGING DIRECTOR, FINANCE, PG ELECTROPLAST LIMITED
Vikas Gupta
MANAGING DIRECTOR, OPERATIONS, PG ELECTROPLAST LIMITED
Pramod Gupta
CHIEF FINANCIAL OFFICER, PG ELECTROPLAST LIMITED
Deepak Agarwal
AXIS CAPITAL
Key numbers — 40 extracted
2.5%
ich was done on 15th of August. Nonetheless, we have been able to grow our RAC business by around 2.5% in first half despite the industry posting almost 25% decline. The washing machine business has d
25%
en able to grow our RAC business by around 2.5% in first half despite the industry posting almost 25% decline. The washing machine business has done extremely well and we have seen a very good growth
55%
mely well and we have seen a very good growth. Compared to last year, washing machines were up by 55% in this quarter. The JV, our Goodworth Electronics has also ramped up well and has posted sales o
Rs. 483 crore
n this quarter. The JV, our Goodworth Electronics has also ramped up well and has posted sales of Rs. 483 crores with Rs. 10.33 crores of EBITDA in first half of FY '26. We remain optimistic that room AC busin
Rs. 10.33 crore
JV, our Goodworth Electronics has also ramped up well and has posted sales of Rs. 483 crores with Rs. 10.33 crores of EBITDA in first half of FY '26. We remain optimistic that room AC business will see increased
Rs. 655 crore
ht delay. Now, I would like you to go through the numbers for Q2. Consolidated revenue stood at Rs. 655 crores, which was a 2% decline over Q2 last year. Of this, product revenues contributed almost Rs. 319
2%
you to go through the numbers for Q2. Consolidated revenue stood at Rs. 655 crores, which was a 2% decline over Q2 last year. Of this, product revenues contributed almost Rs. 319 crores or 49% of
Rs. 319 crore
55 crores, which was a 2% decline over Q2 last year. Of this, product revenues contributed almost Rs. 319 crores or 49% of the total revenue. The AC business contributed Rs. 131 crores and it declined almost c
49%
as a 2% decline over Q2 last year. Of this, product revenues contributed almost Rs. 319 crores or 49% of the total revenue. The AC business contributed Rs. 131 crores and it declined almost close to
Rs. 131 crore
venues contributed almost Rs. 319 crores or 49% of the total revenue. The AC business contributed Rs. 131 crores and it declined almost close to 45% versus last year. The AC business accounted for around 20% o
45%
of the total revenue. The AC business contributed Rs. 131 crores and it declined almost close to 45% versus last year. The AC business accounted for around 20% of total revenue. Washing machines bus
20%
crores and it declined almost close to 45% versus last year. The AC business accounted for around 20% of total revenue. Washing machines business was up 55% during the quarter and it contributed abou
Guidance — 20 items
Vishal Gupta
opening
“We remain optimistic that room AC business will see increased penetration-led growth with the recent rationalization of GST and we believe that in medium term, growth in room AC business will remain robust.”
Vishal Gupta
opening
“We are maintaining the guidance we had shared last quarter.”
Vishal Gupta
opening
“We will be using this year to consolidate, focus on operational levers and execute our platform and capacity investments with discipline.”
Coming to the profitability
opening
“Now, coming to guidance: We are maintaining our guidance shared in 1Q 2026 i.e., FY '26, we expect PGEL to be having revenues in the range of Rs.”
Coming to the profitability
opening
“At the group level, including our joint venture, Goodworth Electronics, we expect consolidated sales to cross Rs.”
Coming to the profitability
opening
“We are continuing with our investment in Greater Noida, Supa, Rajasthan and South India and our FY '26 CAPEX will be in between Rs.”
Vikas Gupta
qa
“Maybe by next quarter, we should have much more clarity on that.”
Vishal Gupta
qa
“And we intend to start CAPEX on that piece of land from FY '27 onwards.”
Vikas Gupta
qa
“And we hope to start the refrigerator production by quarter 4 of FY '27.”
Bala Murali Krishna
qa
“What will be the investment CAPEX amount for FY '27?”
Risks & concerns — 14 flagged
Nonetheless, we have been able to grow our RAC business by around 2.5% in first half despite the industry posting almost 25% decline.
— Vishal Gupta
655 crores, which was a 2% decline over Q2 last year.
— Pramod Gupta
The first question I have, if you could talk a little bit about, you did make a comment with respect to the industry decline.
— Achal Lohade
But just to be clear, in the first half what has been the decline for the industry, in terms of the primary sales and secondary sales volumes, according to your estimate?
— Achal Lohade
So see, primary sales have de-grown by around 20%-25%, but secondary sales have seen a deeper decline.
— Vishal Gupta
Maybe we might see a little slowdown or maybe a little late pickup in this channel filling because of that overhang of the last 1 or 2 quarters.
— Vishal Gupta
So it is a whole value chain which is under pressure right now.
— Vishal Gupta
So what gives confidence because when back of the analysts calculation suggests that the asset for H2 would be much higher with pressure on channel and brand to clear their inventory and we have higher base for Q4 as well.
— Keyur Pandya
So we actually were the first one and we actually in the last quarter itself had anticipated a very weak second quarter.
— Pramod Gupta
But in our case, in the first half, we had a very small growth despite the industry being a decline.
— Pramod Gupta
There was, in fact, a small decline in the Y-o-Y basis, not because of volumes, but because the pricing is down there, because the raw material prices have come down, especially the plastic there.
— Pramod Gupta
So from that point of view, there is going to be a pressure on most of the brands to actually increase the pricing of the existing and new models because there is a cost inflation which is there in the key raw material.
— Pramod Gupta
Then just one last question on our margins on the call that we have had that we could possibly do the revenues that we have guided for, is there going to be a margin pressure in terms of if we have to fulfill our targets?
— Dhaval Jain
See, the margin guidance is actually built in the numbers that we have guided for and we are aware of what we need to do and after doing all the consideration only we have given the net profit and sales guidance, but yes right now, as Vishal ji had explained the whole value chain and the AC business is under pressure because of the high inventory and last year or the last season not going well, but we are hoping that from January-February onward things will start easing as the season starts.
— Pramod Gupta
Q&A — 12 exchanges
Q
Hi, good evening, sir. The first question is regarding the POS device you have received the order. So what is the revenue potential of this order and what is the market potential of this order? Secondly, on the capex side, we have a MoU with the Maharashtra government program and also the AP government also has a program. So how are you planning and how many years you can capitalize it, sir?
Vishal Gupta
Mr. Bala Murali, can you just repeat the whole question because the first part was not very clear. It was not audible. Can you be a little clear, please and louder, please? Yes. The first question is regarding the POS have issued the customer. So what is the revenue potential of this order and how many units they are planning and how it should scale up? And also, any other potential customers also there in this sector? Secondly, on the CAPEX you have MoU with Maharashtra and Andhra Pradesh, around Rs. 1,000 crores, how we are going to require CAPEX and when we can? So first of all, Vikas, can
Q
Hi, sir. Good afternoon. So quickly on the cash flow side, where do you see end for full year because we have seen a significant cash flow in H1. So where do you see for full year?
Pramod Gupta
Cash flow for us in the first half has been okay. We are having higher inventory and that is probably showing a negative cash flow at the operating level as well as at a free cash flow level. Second half should be much better, largely because of two reasons. One is obviously we are hoping to normalize the inventory. And second thing is that because of this GST rationalization, this should help a better working capital cycle at the manufacturing end because we were paying GST at 28% while the input credit on most of the raw material was at 18%. And we were able to recover the 10% additional GST
Q
Good evening, sir. Thank you for the opportunity. The first question I have, if you could talk a little bit about, you did make a comment with respect to the industry decline. But just to be clear, in the first half what has been the decline for the industry, in terms of the primary sales and secondary sales volumes, according to your estimate? And also, if you could touch upon the inventory situation for the companies plus the channel put together as of September and as of now in your estimate?
Vishal Gupta
So see, primary sales have de-grown by around 20%-25%, but secondary sales have seen a deeper decline. That is why we are seeing an elevated level of inventory in the channel. And as per see, we don't have very accurate data on the channel inventory. But our estimate is still, I think, as of 1st November, it should be anything between at least 1.5-2 million, sir, at least. That is the number our estimates are there. And this would be usually what number? Normally what happens, every year during this time of the year, in the month of November, December, normally all the brands do a lot of schem
Q
Thank you. Hi, team. First question is on the AC part. So you have maintained the revenue and profitability guidance. From Q1 to when we stand today, probably everyone's estimate has got cut of the primary and secondary sales because of the extended monsoon and its ripple effect. So what gives confidence because when back of the analysts calculation suggests that the asset for H2 would be much higher with pressure on channel and brand to clear their inventory and we have higher base for Q4 as well. So is it visibility from the brand? If so, is it for Q3 or Q4? Just you can give more or bridge
Pramod Gupta
So we actually were the first one and we actually in the last quarter itself had anticipated a very weak second quarter. And things have more or less been in our expectation, at least for us from the second quarter point of view. And given the kind of inventory levels, etc., which were there and the way things have played out, things are actually going in line with what we expected. Now, the visibility that we have is based on the order book that we have from our clients. And we are quite confident of achieving the numbers which we have guided for in the second half based on the firm and commi
Q
Hi, sir. Sorry, my call got disconnected last time. Sir, I just wanted to understand how are we seeing in the volume terms, the growth in the ACs and like from it has been like, currently we are in the Q3, right? In the Q3, one month is completed and now 10 days is completed. So can I understand, are we gauging that the growth is coming back to us and how about the branded players and what their inventory levels are currently with them?
Pramod Gupta
So there are two parts to the question. One is what do we see the volume growth for the industry, first and second is how do we see the volume growth for us? See, probably the industry on a full year basis is likely to remain flattish in our opinion. But in our case, in the first half, we had a very small growth despite the industry being a decline. And in the second half, we hope to have about 15% or so growth in the overall volume, largely due to two or three factors. One is obviously we are gaining some wallet share. Also, we continue to see some of the brands with whom we work, they are ga
Q
Sir, thank you for the follow up opportunity. If you could talk a little bit about the plastic moulding business, that has seen fairly strong growth for the last 3-4 quarters. So if you could elaborate a little bit in terms of what is driving, what is the outlook, what kind of margins, and what is the capital deployment here, please?
Pramod Gupta
So as we have been highlighting that the plastic injection moulding business, we have not been pursuing very aggressively. Although I must highlight that this quarter, there was not much growth. There was, in fact, a small decline in the Y-o-Y basis, not because of volumes, but because the pricing is down there, because the raw material prices have come down, especially the plastic there. And that has led to about some decline. Although on a full year, on the first half basis, we have seen very small, about 10% kind of a growth in that business. That is the component business for us, including
Q
Hi. Good evening and thank you for taking my question. My question is around demand after the GST cut. It has been about a month and a half and we also have the festive season, then how is demand for the end user-shaped up since the GST cut?
Pramod Gupta
See, at our end, we do not have a first-hand experience, but from whatever we have been hearing from the brands is that the off-season has nothing spectacular or unusual has happened because of the GST cut yet. Probably, it will help a bit when the season starts. See, in India, largely AC still remains largely an impulse purchase product. It is not a planned purchase and therefore, even when the prices have come down, the spurt is probably not seen yet. But we are very hopeful that given the fact that GST has been cut, the penetration-led growth will start to see good improvement, especially i
Q
Good evening. I have a couple of questions. First, could you please throw some light on brand strategy, RAC brand strategy? Are they focusing more on manufacturing in-house or outsourcing?
Pramod Gupta
This is an endless debate and there is a view certain people have and certain analysts believe that it is going to be more in-house and certain analysts are of the view that outsourcing will continue. We are a little biased. I will make it a front because we are dependent on outsourcing of the brands. But we continue to believe that in a highly seasonal business where exports are not so much there for the Indian brands. Actually, it doesn't make a lot of economic sense to do their own plant and do the manufacturing in-house because capital efficiencies are low for most of them, for any single
Q
Sir, just a question on bookkeeping. I was going through our half year balance sheet. Our debt has increased from Rs. 301 crores to Rs. 482 crores, short term and long term both. I was just checking on the Q1 numbers. Q1, our finance cost was around Rs. 34 crores and right now it is Rs. 16 crores. So can I have an understanding how our finance cost has almost gone down by 50% whereas our debts have increased?
Pramod Gupta
Yes, actually we explained this very well in the last quarter itself when we had given an outlook for the full year and this quarter. See, last quarter we had some liquidity challenges because on one hand we had a high inventory and on other hand, we were also facing some challenges on our receivables because receivables got delayed because of the lower sales of some of the brands. So we resorted to two aspects to take care of that. One was to basically discount some of the receivables and also on the payable front, we extended the payables by extending our LCs while resorting to buyer's credi
Q
Hello, thank you for taking my question. So what is our current capacity in RAC, washing machine and coolers and after the new lines are commissioned what will be the new capacity in these categories like for FY '27 and FY '28?
Pramod Gupta
Right now, our capacity in AC is almost close to 3.5 lakh ACs per month on the split side and about 50,000 ACs on the window side and once by December, we are hoping to increase it to about 4.25 lakh in the split side and 50,000 in the window side. And in washing machine the capacity is already expanded and we have about close to 2 lakh washing machines per month capacity today. In coolers, it is about 50,000 coolers per month. And after the CAPEX is incurred, what would be the new capacity which we are planning? CAPEX in washing machine is almost completed. AC as I told you it will go from 3.
Q
Hi, good evening. So I have two questions. One is about a couple of months back, we have announced to foray into the EV bike manufacturing space with Spiro Mobility. So any update on that? Are we still pursuing this or not? The second question is on the AC compressor manufacturing with the Chinese partner. So any update on that?
Vishal Gupta
So that EV thing is getting delayed and our partner for whom we were supposed to start manufacturing in India, they are not able to get their motorcycle approved from ARAI and at the same time, they have shifted some of their focus to Africa market. They are trying to grow that business in Africa market. They already have a strong presence in Africa and at the same time they are maybe, but I can feel that they have shifted their focus to Africa market and coming back to your compressor thing, we have stated in this call earlier also, we are still waiting for the approval that our partner is wa
Q
I would like to thank you all for sparing your time and we are available to answer any further questions you may have. Thank you. Thank you all.
Management
Speaking time
Pramod Gupta
26
Vishal Gupta
17
Moderator
14
Achal Lohade
14
Vikas Gupta
9
Bala Murali Krishna
8
Shreyansh Jain
6
Kaushik Mohan
4
Dhaval Jain
4
Vipraw Srivastava
3
Opening remarks
Deepak Agarwal
Thanks. Good afternoon, everyone. On behalf of Axis Capital, I welcome you all to PG Electroplast Q2 FY '26 Earnings Conference Call. Today, we have with us Senior Management represented by Mr. Vishal Gupta - Managing Director, Finance; Mr. Vikas Gupta - Managing Director, Operations and Mr. Pramod Gupta - Chief Financial Officer. Without taking much of time, I will hand over the floor to management for the opening remarks post which we open the floor for Q&A. Thanks and over to you, sir.
Vishal Gupta
Thank you, Deepak. Good evening, everyone. Thank you for joining this call today. Hope all of you are doing well. I am sorry because there was a little delay in uploading the results because the board meeting got over at 4.40 only. So we didn't get much of the time to upload the results earlier. It has been done. I think you people can have a look at that. So let me start by saying this that this quarter and first half of FY '26 has been softer than what we have expected. The room AC business was impacted due to early monsoons and then GST cut announcement which was done on 15th of August. Nonetheless, we have been able to grow our RAC business by around 2.5% in first half despite the industry posting almost 25% decline. The washing machine business has done extremely well and we have seen a very good growth. Compared to last year, washing machines were up by 55% in this quarter. The JV, our Goodworth Electronics has also ramped up well and has posted sales of Rs. 483 crores with Rs. 1
Pramod Gupta
Hello and good evening, everyone. I am sure all of you have seen the financials. I also apologize for putting up the data and financials and presentation with slight delay. Now, I would like you to go through the numbers for Q2. Consolidated revenue stood at Rs. 655 crores, which was a 2% decline over Q2 last year. Of this, product revenues contributed almost Rs. 319 crores or 49% of the total revenue. The AC business contributed Rs. 131 crores and it declined almost close to 45% versus last year. The AC business accounted for around 20% of total revenue. Washing machines business was up 55% during the quarter and it contributed about Rs. 188 crores to the sales during the quarter. Our 100% subsidiary PG Technoplast reported revenues of Rs. 295 crores during the quarter.
Coming to the profitability
EBITDA for the quarter stood at Rs. 45 crores and net profit was at Rs. 2.4 crores. The net profit drop is almost due to lower operating leverage. Also, we had a FOREX loss of Rs. 8.4 crores during the quarter versus the gain of Rs. 1.2 crores during the same quarter last year. We have worked on all our costs during the quarter and optimized wherever possible. From a balance sheet standpoint, the company remains on a strong footing. Cash and equivalents at the end of quarter 2 are Rs. 630 crores and we are net cash still. Return on capital employed stands at 20.8% and our fixed asset turnover remains healthy at over 5x on a trailing 12-month basis. Now, coming to guidance: We are maintaining our guidance shared in 1Q 2026 i.e., FY '26, we expect PGEL to be having revenues in the range of Rs. 5,700-Rs. 5,800 crores and net profit is expected to be between Rs. 300-Rs. 310 crores. At the group level, including our joint venture, Goodworth Electronics, we expect consolidated sales to cross
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