PG Electroplast Limited — Q3 FY26 earnings call

Call held 3 Feb 2026

Management summary

PG Electroplast delivered a strong Q3 FY26, characterized by massive market share gains in the Room AC segment despite a broader industry decline. Management remains highly optimistic about the outsourcing trend in consumer durables, citing the uneconomical nature of in-house manufacturing for brands due to high seasonality. The company is aggressively expanding capacity into refrigerators and washing machines to sustain long-term growth.

Highlights

  • Consolidated Revenue reached ₹1,412 crores, a robust growth of 46% YoY.

  • AC business revenue surged 80.5% YoY to ₹932.5 crores, significantly outperforming the industry.

  • Washing machine business grew 45% YoY, contributing ₹194 crores to the quarterly revenue.

  • EBITDA for the quarter stood at ₹126 crores; Net Profit (PAT) was ₹60.3 crores.

  • Maintained full-year FY26 guidance of ₹5,700-5,800 crores in sales and ~₹300 crores in profit.

  • Capex guidance for FY26 set at ₹700-750 crores, including a new refrigerator facility.

  • Return on Capital Employed (ROCE) reported at 18.6% with a healthy net fixed asset turnover of over 6x.

Key financials

  1. Revenue ₹1,412 Cr +46%YoY
  2. EBITDA ₹126 Cr
  3. PAT ₹60.3 Cr
  4. ROCE 18.6%
  5. Cash and Equivalents ₹483 Cr

What they filed

Q1 FY27: revenue up 35.2%, net profit up 13.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue671 968 1,910 1,504 655 −2%1,412 +46%1,717 −10%2,034 +35%
EBITDA56 85 212 121 30 −46%117 +38%119 −44%148 +22%
Net profit19 40 145 67 3 −84%62 +55%65 −55%76 +13%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • AC Business
    ₹932.5 Cr Revenue80.5% Growth66% Revenue Contribution
  • Washing Machine Business
    ₹194 Cr Revenue45% Growth
  • PG Technoplast (Subsidiary)
    ₹1,067 Cr Revenue
  • Goodworth Electronics (TV JV)
    ₹670 Cr 9M Revenue₹16.7 Cr 9M EBITDA

Guidance & targets

Revenue

  • Consolidated Sales Revenue · FY26 · High confidence ₹5,700 - 5,800 crores
    We are maintaining our guidance, which we have given in the first quarter '26 of INR5,700 crores to INR5,800 crores of sales

    — Pramod Gupta, CFO

Profitability

  • Net Profit Profitability · FY26 · High confidence ₹300 crores
    about INR300 crores of profit.

    — Pramod Gupta, CFO

Capex

  • Total Capex Capex · FY26 · High confidence ₹700 - 750 crores
    the capex will be around INR700 crores to INR750 crores.

    — Pramod Gupta, CFO

Capacity

  • Refrigerator Annual Capacity Capacity · by Q4 FY27 · High confidence 1.2 million units
    we are putting up a capacity of 1.2 million refrigerators in our Sricity factory. So that should be up and running by the fourth quarter of FY '27.

    — Vikas Gupta, Managing Director

Volume

  • AC Manufacturing Volume Volume · FY26 · Medium confidence 20 lakhs units

    Previously 17-18 lakhs units → 20 lakhs units

    we are making close to about 17, 18 lakh ACs is what we have done in the last financial year and this year, hope we are probably going to close at close to 20 lakhs AC.

    — Pramod Gupta, CFO

Risks & concerns

  • High Channel Inventory

    medium

    Industry-wide channel inventory is estimated at 5 million units, which could delay fresh orders if the summer season is late.

    Both acknowledged

  • Commodity Price Inflation

    medium

    Rising prices of copper and aluminum are impacting margins, requiring price pass-throughs to customers.

    Management acknowledged

  • Forex Volatility

    low

    The company reported a forex loss of ₹8.2 crores in Q3 versus ₹1.4 crores in the previous year.

    Management acknowledged

Areas of evasion (2)

  • Specific volume growth percentages (YoY/QoQ) were deferred to offline discussion.
  • Cash flow from operations for 9M was not readily available.

Q&A highlights

3 direct
Q4 Profitability Target Direct
Typically, our fourth quarter is the strongest quarter... we actually delivered INR146 crores in the fourth quarter itself [last year]. And typically, a lot of operating leverage also kicks in during this quarter.

Analysts were skeptical about hitting the ₹300cr PAT target given the 9M run rate; management clarified that Q4 is seasonally the strongest due to operating leverage.

Asked by Vishal Dudhwala

Market Share and Outsourcing Trends Direct
We are almost 11% to 12% of the overall manufacturing of AC in India currently... the economics is actually not in favor of doing in-sourcing, and it makes more sense to actually outsource the AC manufacturing.

Management argues that even as they reach high market share, the shift from in-sourcing to outsourcing by major brands provides a massive growth runway.

Asked by Keyur Pandya

Inventory Levels and Price Hikes Direct
Price increase is surely likely to come, there is no choice because the kind of movement, which we have seen in the commodities, especially copper and aluminum, it's not possible to actually absorb that kind of a price increase by anybody.

Confirms that despite high channel inventory (5 million units), commodity inflation will force price hikes, which PGEL has already started implementing in Jan/Feb.

Asked by Mohit Jain

2 min read 5 chapters

Detailed narrative

AC Segment Outperformance

PGEL's AC business grew by 80.5% YoY in Q3, reaching ₹932.5 crores. This is particularly notable as the broader industry saw a decline of 15-20% in the same period. Management attributes this to significant market share gains and a shift in brand strategy toward outsourcing to contract manufacturers like PGEL to manage seasonality more efficiently.

Strategic Entry into Refrigerators

The company is investing ₹300 crores into a new refrigerator facility in Sricity with an annual capacity of 1.2 million units. Mass production is slated for Q4 FY27, targeting the single-door direct cool category initially. Management expects 30-40% capacity utilization in the first year, leveraging their unique location advantage in Southern India to save on logistics costs for brands.

Inventory and Working Capital Management

PGEL is carrying a high raw material inventory of approximately ₹1,160 crores to support peak manufacturing in Q4 (January-March). While total system inventory (brands + channel) is high at 5 million units, PGEL has reduced its own AC division inventory by 15-17% from the third quarter. Management remains confident that a normal summer will clear the channel and drive Q4 volumes.

Margin Dynamics and Price Pass-through

Q3 margins faced slight pressure (150 bps impact on AC margins) due to a shift to SAP ERP classification and a strategic decision to support clients during a period of industry pain. However, management has already negotiated price increases for January and February dispatches to offset rising commodity costs in copper and aluminum.

Long-term Capacity and Hub Strategy

The company is moving toward a 'large campus' model to drive backward integration and cost leadership. They have acquired large land parcels in Sricity (52 acres) and Ahmednagar (72 acres) to create three manufacturing hubs (North, West, South). This strategy aims to improve asset utilization and offer better logistics efficiency to customers across all product categories.

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