This smallcap consumer electronics stock has zoomed over 300% in 8 months

PG Electroplast hit a new high of Rs 718.35, surged 15 per cent after the company said its subsidiary PG Technoplast has entered into electric vehicle assembly and lithium-ion battery assembly

Shares of PG Electroplast (PGEL) hit a new high of Rs 718.35, as they surged 15 per cent on the BSE in Tuesday’s intra-day trade after the company said its subsidiary PG Technoplast has entered into electric vehicle (EV) assembly and lithium-ion battery assembly. 

 

The stock of the consumer electronics company has surpassed its previous high of Rs 710.30 that it touched on November 11, 2024. In 8 months, the market price of the smallcap company has zoomed 315 per cent from Rs 173 on March 19.

 

PG Technoplast Private Limited has signed a definitive agreement with Spiro Mobility to become an exclusive manufacturing partner for manufacturing of the EVs of Spiro Mobility (Spiro) in India.

 

The Primary responsibility of PG Technoplast will be to set up and manage the manufacturing facilities for EV, Lithium-Ion batteries and related components and for procurement of parts and raw materials for the same as specified by Spiro.  Spiro shall be responsible for research and development, marketing, sale, and distribution of the EV products manufactured by PG Technoplast, the company said.

 

PGEL is a one-stop solution provider for Electronic Manufacturing Services (EMS) and contract manufacturing to most leading consumer durable and electronics brands in India. The company has one of the biggest capacities in plastic injection molding and has capabilities across the value chain in Original Equipment Manufacturing (OEM) and Original Design Manufacturing (ODM) products like room ACs, washing machines, air-coolers and LED TVs.

 

Meanwhile, during the July to September quarter (Q2 FY25), PGEL had reported a healthy 57.2 per cent year-on-year (YoY) growth in its consolidated profit after tax at Rs 19.47 crore. Earnings before interest, tax, depreciation, and amortisation (Ebitda) increased 48.2 per cent YoY to Rs 60.54 crore; margin improved to 9.0 per cent from 8.9 per cent in Q2FY24 due to cost control and operating leverage. The company's sales grew 45.8 per cent YoY to Rs 671.30 crore.

 

The management sees increased opportunities in the existing and new clients based on the current business environment. With new capacities and capabilities, the company is uniquely positioned in the consumer durables and plastics space in India. In the coming years, the company aspires to have Industry-leading growth in revenues, gradual improvement in margins due to operational efficiencies and operating leverage, best-in-class capital efficiency resulting from improved cash flows and balance sheet optimisation, the management added.

 

For FY25, PGEL has revised revenues guidance upward to Rs 4,250 crore from Rs 3,650 crore earlier, which will be a growth of 54.7 per cent over FY2024 consolidated revenues (despite the shift of TV business to Goodworth Electronics).  The company's revised net profit guidance now stands at Rs 250 crore against the earlier guidance of Rs 216 crore, which will be a growth of 82.5 per cent over the FY2024 net profit of Rs 137.0 crore.

 

The management said the government's reforms measures such as Digital India, Make in India, Power for All and Jan Dhan-Aadhar Mobile Trinity, are providing fresh impetus to the consumer appliance and durable industry.  The rapid rate of urbanisation, growth of young population with rising income levels is leading to a large emerging middle class in India, which implies a huge potential demand for the consumer appliance and durable market in coming years, the management said. 

 

Further the government’s initiatives of promoting electronic manufacturing and treating the industry as one of the key pillars of the Digital India Program, opens new and exciting opportunities for the industry, it added.