Q1FY26 net profit down 21% to ₹67 crore; revenue up 14% to ₹1,504 crore.
FY26 revenue growth forecast lowered to 17–19% from 30%; profit growth cut to 3–7% from 39%.
Nuvama slashes target price by 35% to ₹710; flags high inventory and softer AC demand.
Shares of PG Electroplast remained under pressure for the fifth session in a row on August 11, as investors continued to dump the stock in the wake of disappointing Q1 results and a sharp downgrade to the company’s FY26 guidance. In today’s session, the stock plunged another 15%, extending its five-day slide to about 42%.
For the June quarter, the company reported a 21% year-on-year drop in net profit to ₹67 crore, compared to ₹85 crore in the same period last year. Revenue, however, rose 14% to ₹1,504 crore.
Despite the top-line growth, the management has scaled back its full-year revenue growth guidance to 17–19%, from an earlier estimate of 30%. Net profit growth guidance was also trimmed to 3–7% from 39% previously, while projections for product business revenue growth were cut to 17–21% (₹4,140–₹4,280 crore) from the earlier target of 35% (₹4,770 crore).
The company attributed the weaker start to the year partly to the early arrival of the monsoon, which dampened seasonal sales for room air conditioners. Despite that, Managing Director-Finance, Vishal Gupta, said underlying demand indicators remained healthy, supported by relatively low penetration in core categories such as room ACs and washing machines.
Gupta added that the firm would continue to focus on product innovation, capital-efficient expansion, and strengthening client relationships, with planned investments in new platforms and capacity enhancement progressing on schedule.
Following the guidance revision, Nuvama Institutional Equities lowered its price target on the stock by 35% to ₹710 from ₹1,100. The new target implies a potential upside of 25% from Friday’s closing price. The brokerage also cut its earnings per share forecasts for FY26, FY27 and FY28 by 35%, 25% and 10% respectively, to factor in lower growth and margin assumptions in the room AC segment, as well as higher interest costs this year.
The management also pointed towards high inventory levels as a key challenge, with many contract manufacturers slowing production to address the build-up. While Nuvama pointed these operational headwinds, it also highlighted PG Electroplast’s strategic shift from a traditional plastic moulding business to a significant OEM/ODM solutions provider in India’s consumer durables space. The brokerage flagged competitive intensity and supply chain disruptions as key risks to monitor.
