Target: ₹770

CMP: ₹614.50

India’s current air conditioner (AC) penetration is around 8-10 per cent of 300 million households, but it’s expected to reach 50 per cent by 2037. Factors like low AC penetration, falling prices, and changing consumer lifestyles are driving demand in the electronics industry.

PG Electroplast offers a wide range of air conditioning solutions, including energyefficient and advanced products with features like IoT connectivity and self-cleaning systems. Their production capacity is 2 million Indoor Units (IDUs) and 1 million Outdoor Units (ODUs) annually. The Room AC segment contributed 75.2 per cent of revenue, with ₹882 crore in Q1 FY25, a 130 per cent growth.

We believe the company will greatly benefit from government support for consumer electronics production through initiatives like PLI schemes and the allowance of 100 per cent FDI in electronics hardware manufacturing. The company’s growth will be driven by its expanding product portfolio, with new, innovative offerings set to launch in key focus areas in the coming quarters.

Management remains optimistic about prospects across all business segments. Additionally, they have provided strong guidance for revenue and net profit growth in FY25, along with a slight upward trend in EBITDA margins.

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