What’s better than finding a hidden gem? Watching it multiply eightfold in just two years! PG Electroplast (PGEL), once a humble name in the plastics business, has turned into a powerhouse, capturing the imagination of investors and consumers alike.
With a stellar growth story and tailwinds working in its favour, PGEL has emerged as a poster child for India’s manufacturing revolution. But what’s behind this meteoric rise, and where does the road lead from here? Let’s dive in.
From Plastic Moulds to a Manufacturing Powerhouse
PG Electroplast started as a plastic moulding manufacturer in 2003, but its ambitions quickly outgrew its origins.
Over the years, the company has transitioned into a leading player in India’s Electronic Manufacturing Services (EMS) space, specialising in Original Equipment Manufacturing (OEM) and Original Design Manufacturing (ODM).
Today, PGEL provides end-to-end solutions for consumer durables such as air coolers, washing machines, air conditioners (RACs), and LED TVs.
Here’s a quick timeline of PGEL’s evolution:
2003: Began as a plastic moulding manufacturer.
2014: Entered air cooler production, marking its move into product manufacturing.
2017: Expanded into washing machine production with semi-automatic models.
2018–2021: Launched RAC units and fully automatic washing machines.
2022: Forayed into LED TV manufacturing.
2024: Partnered with Jaina Group to scale LED TV and IT hardware production.
With 11 manufacturing units and over 5,000 employees, PGEL is now a one-stop solution provider for consumer durables, combining backward integration with cutting-edge technology. The company’s strategic investments in ODM for air coolers, washing machines, and RACs have positioned it as a leader in India’s evolving manufacturing landscape.
The Parabolic Rise: What’s Driving the Growth?
PGEL’s incredible stock performance—8x in just two years—is no fluke. Several factors have fueled this rally:
Stellar Revenue and Profit Growth:
Between FY20 and FY24, PGEL achieved a 44% revenue CAGR and a jaw-dropping 168% PAT CAGR. This growth was underpinned by a 90% revenue CAGR in its RAC and washing machine segments over FY20–24.
Government Incentives:
The Production-Linked Incentive (PLI) scheme has been a game changer. PGEL has invested Rs. 320 crore to leverage this initiative, securing a leading position in domestic manufacturing while reducing import dependency.
Backward Integration and Cost Efficiency:
With 70% of RAC components manufactured in-house, PGEL has built a competitive moat. Its EBITDA margin improved by 240 bps between FY21 (7.1%) and FY24 (9.5%), driven by operational efficiencies and superior quality control.
Expanding Client Base:
PGEL has doubled its clientele to 107 in FY24 from just 45 in FY22, reflecting strong demand for its ODM and OEM solutions.
Favourable Market Dynamics:
India’s RAC market is projected to grow at a CAGR of 18% from FY24 to FY29, and PGEL is poised to capture a significant share of this booming market.
What’s Next for PG Electroplast?
IT Hardware: A New Frontier
PGEL’s joint venture with the Jaina Group under the IT Hardware PLI 2.0 scheme is a bold step into high-growth territory. The scheme aims to boost domestic production of laptops, tablets, and servers. With an average 5% production-linked incentive on incremental sales and a six-year horizon, PGEL is well-positioned to make a mark.
The company’s partnership with Jaina Group—one of India’s three Google ODM licensees—provides access to global markets and top-tier sourcing capabilities. Although still in its early stages, the IT hardware venture could become a significant growth driver, adding a new dimension to PGEL’s story.
Electric Vehicles (EVs): Revving Up for Growth
PG Electroplast has ventured into the EV market through an exclusive partnership with Spiro Mobility to manufacture its EVs in India. This move leverages PGEL’s expertise in electronics and plastic moulding, aligning with India’s sustainability goals. This diversification adds a promising growth avenue to PGEL’s portfolio, further reducing its dependence on seasonal RAC sales.
PCB Assembly: A High-Margin Opportunity
Printed Circuit Board Assembly (PCBA) is emerging as PGEL’s next big bet. Contributing 14% to FY24 sales with 132% YoY growth, this segment is poised for a 15% CAGR over FY24–27E. With high margins and scalable operations, PCBAs could help PGEL pave the way for long-term profitability.
Conclusion: PGEL’s Journey is Far From Over
PG Electroplast’s transformation from a plastic mould player to a diversified manufacturing powerhouse is nothing short of remarkable. With a strong foothold in the RAC and washing machine markets, strategic ventures into IT hardware and EVs, and tailwinds like the PLI scheme, PGEL’s growth story remains compelling.
While challenges like supply chain disruptions and competitive pressures persist, PGEL’s ability to innovate, integrate, and scale gives it a strong edge. For investors, this stock may have already delivered an 8x return, but its journey seems far from over. PGEL is a testament to India’s manufacturing renaissance—one that’s just getting started.
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