Steady Growth in Q1FY24 Financial Results Reported by PG Electroplast Limited

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Mumbai,  August, 2023: PG Electroplast Ltd. (PGEL), one of the pioneers and leaders in the Electronic Manufacturing Services and Plastic Molding, announced its results for the quarter ended June 30th, 2023, as approved by its Board of Directors.

Key Financial Highlights:

Quarter ended June 30th, 2023

  •  Net Sales for the quarter was INR 6.76 billion – a growth of 26.3% YoY.
  •  Operating profit for the quarter was INR 642.0 million a growth of 84.3%
  •  Quarterly EBITDA stood at INR 671.0 million versus Rs 376.4 million in 1QFY2023 – a growth of 78.3%.
  •  Quarterly Net profit stood at INR 338.1 million versus INR 164.0 million in 1QFY2023 – a growth of 106.1%.

Other Highlights:

1QFY2024 was strong quarter for PG Electroplast despite all the weather related challenges for the AC Business:

  •  Consolidated Sales crossed INR 6.76 billion with Product business sales crossing INR 4.41 billion. PGEL’s 100% subsidiary, PG Technoplast, crossed INR 3.92 billion in revenue in 1QFY2024.
  •  Company has developed, validated, and launched successfully new products in washing machines and is in the process of developing new platforms for Room AC. During the year company plans to further enhance capacity across Room AC and TV business in JV.
  •  The Product business contributed 65% of the total revenues in 1QFY24. The Product business grew 39.9% YoY for the quarter. In AC product business during the quarter, company had over 52% growth.
  •  The Washing machines business declined 7% due to supply chain issues due the new BIS norms for toughened glass tops. However, the order book for the Washing Machine business remains robust and the company is on track to scale the business significantly in FY2024.
  •  TV & Electronics business contributed 7.3% of the total revenues and grew 110% in 1QFY2024.
  •  Significant enquiries and commitments for new business are being witnessed across business segments and addition of new clients has been robust across verticals.
  •  Capital efficiency of business improved, and company’s RoCE was 22.8% and RoE was 24.9% for the Trailing 12 months, ending June 2023. Net fixed Asset turns for the consolidated entity is at 4.5x.
  •  Company plans to further invest in R&D and new product development. Company is aggressively investing in new platforms in both RAC and washing machines for future growth.

“PG’s Product business is gaining scale and is now the dominant contributor to the consolidated Sales. New Product innovations, and accelerating investment in newer platforms for differentiated offerings is boosting growth outlook across product segments. With 2 new facilities, one for RAC and one for TV, along with expansion of the Supa facility, the company will be increasing its capacities significantly. With new partnerships, our positioning in Consumer Electronics and Consumer Durables is further strengthening.

Focus on capital efficiency has started bearing fruits for the company. On a Trailing 12month basis, the Company has crossed 22% RoCE and 24% RoE, and the Management remains confident and committed to delivering industry leading growth with best in class return ratios in the coming years.” said Mr. Vishal Gupta, M.D. Finance.

Future Outlook:

Management sees increased opportunities in the existing and new clients and based on the current business environment. With new capacities and capabilities, company is uniquely positioned in the consumer durables & plastics space in India. In coming years, 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 & balance sheet optimization.

Specific guidance for FY2024

  •  Sales guidance of INR 28 billion for FY2024 which will be a growth of 30% over FY2023 consolidated sales and operating profit guidance of INR 2.10 billion which will be a growth of 28% over FY2023 operating profit of INR 1.64 billion.
  •  The growth in product business i.e., Washing Machines, Room Air Conditioners and Air Coolers is expected to be ~43% to INR 19.20 billion in FY2024 from INR 13.41 billion in FY2023.
  •  Capex for FY2024 will also be in the range of INR 1.70-1.80 billion and Company will invest in new platforms for washing machines and air conditioners. Also, Company will further expand Room AC capacity along with a new location for Integrated AC manufacturing plant in North India.