PG Electroplast price targets cut on FY26 outlook; stock still a ‘buy’ after 23% plunge

A couple of brokerages have trimmed their target prices for PG Electroplast (PGEL) after the company’s disappointing June quarter results, with profits missing estimates due to softer seasonal demand.

Analysts attributed the weaker performance in the AC segment to an early monsoon, which shortened the peak season for room air-conditioners. Rising supply costs and negative operating leverage further dented profitability. Following Friday’s 23 per cent plunge in PG Electroplast’s share price, at least two brokerages maintained their ‘buy’ rating on the stock.

Nuvama said PGEL's consolidated revenue grew 14 per cent YoY led by 17 per cent growth in the Products segment while PAT fell 20 per cent YoY as it incurred an additional interest cost to pay vendors. 

"While April was robust (up 70 per cent YoY), May sales moderated to 18 per cent growth, and June and July suffered a sharp order cancellations (down 70 per cent YoY), leading to adverse operating leverage. Revenue growth guidance for FY26 stands reduced to 18 per cent (earlier 30 per cent) along with Ebitda margin contraction of 125–150 bps, assuming: i) weak Q2, Q3 performance anticipation; ii) large inventory; and iii) softened demand. PGEL remains committed to its long-term FY28 revenue target of INR90bn based on 4–5x asset turns," it said. 

Nirmal Bang said net profit guidance has also been reduced to Rs 300 crore from the earlier Rs 400 crore target. The product business, which includes washing machines, room ACs, and coolers, is expected to grow 17-21 per cent (earlier 30 per cent).

"We expect PGEL to deliver a revenue and PAT CAGR of 20 per cent and 18 per cent, respectively, over FY25–FY27E. However, we are cutting our FY26/FY27 EPS estimates by 27 per cent/26 per cent as we factor in slower RAC growth, softer margins, lower operating leverage, and elevated inventory levels—which the management expects to clear by Jan-27. These changes lead us to a revised target price of Rs 700," Nirmal Bang said.

Nuvama has cut its FY26, FY26, FY27 and FY28 earnings estimates by 10-36 per cent as it lowered RAC growth and margin assumptions and also baked in higher interest costs for FY26E, yielding a June 2026E target of Rs 710 against Rs 1,100 earlier. 

Nirmal Bang maintained its 'Buy' rating as it remained structurally positive on the company’s long-term growth prospects.