PG Electroplast share bleeds 20%, takes 4-day fall to 40%; should you buy PGEL stock?

Shares of PG Electroplast Ltd (PGEL) plunged 20 per cent in Monday's trade, in addition to a 20 per cent slide on Friday, taking its four-day fall to 40 per cent. The sharp selloff on the counter was led by order cancellations and a cut in annual guidance amid sectoral headwinds. Excess inventory is in place, analysts said post Q1 results, even as they retained 'Buy' on the PGEL stock. 

On Monday, the stock fell 20 per cent to hit a low of Rs 473.75 on NSE. This was the fourth straight day of fall for the stock.  

"A quarter to forget for PGEL, but we reckon it’s not as bad. With massive order cancellations resulting from the season failing to rebound, the cut in guidance was inevitable. Further, high channel inventory is an industry-wide issue and not that of PGEL alone, liquidation of which hinges upon upcoming festivities," said JM Financial.

The brokerage said despite a revised revenue growth guidance of 17-19 per cent, PGEL is yet likely to outgrow the industry and retain manufacturing market share. It is also quite likely that the stock price correction has factored in a large portion of negatives. 

"Despite this cut, PGEL offers exposure to a company gaining market share and deepening capabilities; expected to register a revenue/EPS CAGR of 28/31 per cent with and average RoE of 14 per cent over FY25-28E. Target price stands at Rs 790. Retain Buy," it said.

Nirmal Bang said it has cut PGEL’s net profit guidance to Rs 300 crore from Rs 400 crore earlier. Growth expectations for the product business—which includes washing machines, room ACs, and coolers—have been reduced to 17–21 per cent from 30 per cent.

“We expect PGEL to post revenue and PAT CAGRs of 20 per cent and 18 per cent, respectively, over FY25–FY27E. However, we are trimming our FY26/FY27 EPS estimates by 27 per cent and 26 per cent, factoring in slower RAC growth, softer margins, lower operating leverage, and elevated inventory levels—which management expects to clear by Jan-27. These revisions bring our target price down to Rs 700,” Nirmal Bang said.

Nuvama said PGEL’s consolidated revenue grew 14 per cent YoY, driven by 17 per cent growth in the Products segment, while PAT fell 20 per cent YoY due to additional interest costs paid to vendors.

It added that April sales jumped 70 per cent YoY, but growth slowed to 18 per cent in May, with June and July hit by sharp order cancellations—down 70 per cent YoY—leading to adverse operating leverage. Consequently, FY26 revenue growth guidance has been cut to 18 per cent (from 30 per cent) along with an Ebitda margin contraction of 125–150 bps, assuming: i) weak Q2 and Q3; ii) high inventory; and iii) soft demand. PGEL still targets FY28 revenue of Rs 90 billion, based on 4–5x asset turns.

Nuvama has cut its FY25–FY28 earnings estimates by 10–36 per cent, citing lower RAC growth and margins as well as higher interest costs for FY26E. Its June 2026E target price is now Rs 710 versus Rs 1,100 earlier.

Nirmal Bang maintained its ‘Buy’ rating, citing a structurally positive long-term growth outlook.