PG Electroplast: PAT growth of 126% & revenue growth of 75% in H1-25 at a PE of 92
Guidance for 83% PAT growth & Revenue growth of 33% with improvement in margin in FY25. Orders in place to support the growth for FY25. On track to accelerate product business growth significantly.
1. Electronic Manufacturing Services provider
pgel.in | NSE: PGEL
2. FY20-24: PAT CAGR of 169% & Revenue CAGR of 44%
3. Average FY24: PAT up 77% & Revenue up 27% YoY
4. Strong Q2-25: PAT up 57% & Revenue up 46% YoY
5. Strong H1-25: PAT up 126% & Revenue up 75% YoY
6. Business metrics: Strong & improving return ratios
7. Outlook: PAT growth of 83% & Revenue growth of 55%
8. PAT growth of 126% & revenue growth of 75% in H1-25 at a PE of 92
9. Hold?
If I hold the stock then one may continue holding on to PGEL
The management is bullish about its prospects in FY25 as it has revised its guidance upwards after a strong H1-25.
PGEL has a track record of growth, with a revenue CAGR of 30%+ for FY16-24, followed by an extremely strong quarter in Q1-25.
Order book is in place to support the growth guidance for FY25
Order, book and visibility for product business remains very robust and the company is on the track to accelerate product business growth significantly in FY25
The underlying business momentum is strong and will sustain future growth
The growth in product businesses that is washing machine, room air conditioners and air coolers is expected to be around 78% from Rs.1668 crore to around Rs.2,975 crore
Company is developing new offerings in focus segments and will be launching the same in coming quarters
10. Buy?
If I am looking to enter PGEL then
PGEL has delivered PAT growth of 126% & Revenue growth of 75% in H1-25 at a PE of 92 which makes valuations fully priced in the short term.
The FY25 outlook for guiding for PAT growth of 83% & Revenue growth of 58% with improvement in margin and the support of strong order book at a PE of 92 makes the valuation fully priced from the medium term
While no quantitative numbers are given by PGEL, it is pointing towards a story which would continue beyond FY25. At a PE of 92 there would be opportunity over the longer term if the past performance is repeated.
The Management is enthused about the overall opportunity size and anticipates high growth rates in the industry segments where, company has presence.
Company is uniquely positioned in the consumer durable & plastics space in India and would derive higher revenue growth by growing its market share in the customer outsourcing wallet.
Company’s management see exciting times ahead for all its business segments.
At a PE of 92 the margin of safety is limited in the stock.
Previous Coverage of PGEL
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