PG Electroplast shares extend losses to 18%; equity worth ₹501 crore changes hands

Shares of PG Electroplast slumped as much as 18% on Monday, August 11, extending their losses from Friday's 23% fall, which was the biggest on record for the company. The stock fell last Friday after its June quarter results and a sharp cut to its full-year guidance.

With this fall, the stock has now halved on a year-to-date basis.

A few minutes earlier, as many as 79 lakh shares or 2.82% of the outstanding equity of PG Electroplast changed hands through multiple block deals. Shares changed hands at an average price of ₹501 per share, which takes the total transaction value to ₹501 per share.

Brokerage firm Nuvama though, has maintained its "buy" recommendation on the stock. However, Nuvama has slashed its price target on the stock by 35% to ₹710 from ₹1,100 earlier. The revised price target implies a potential upside of 25% from Friday's closing levels.

The brokerage has also cut PG Electroplast's financial year 2026 Earnings Per Share (EPS) estimates by 35%, for financial year 2027 by 25% and for financial year 2028 by 10% respectively on the back of lower Room AC growth and margin assumptions, along with higher interest costs for the current financial year.

PG Electroplast now expects revenue growth between 17% and 19% for the full year, in comparison to the 30.3% growth projected earlier. The group revenue guidance was also revised to 21% and 23% from 33% earlier. The net profit growth guidance was slashed to 3% and 7% from 39.2% guided earlier, while the product business revenue growth guidance was trimmed to be between 17% and 21% from the 35% guided earlier.

The management during its earnings call said that it remains confident of the long-term growth opportunity, but trimmed its full-year capex guidance to be between ₹700 crore and ₹750 crore from ₹800 crore to ₹900 crore earlier.

Inventory build up was a major issue highlighted by the management during the earnings call, adding that most of the contract manufacturers are slowing down production due to the high inventory build-up.

Nuvama believes that PG Electroplast is a compelling investment idea is its strategic evolution from a traditional plastic moulding business to a key OEM / ODM solutions provider for consumer durables companies in India.

Competitive intensity, supply chain disruption are some of the key risks highlighted by Nuvama.

Out of the 11 analysts that have coverage on PG Electroplast, seven of them have a "buy" rating, three say "hold", while one has a "sell" recommendation on the stock.

Shares of PG Electroplast are now trading 14% lower at ₹505. The stock had declined 23% last Friday, after the company cut its guidance for the full year, which was the biggest single-day fall on record. The fall came just a few months after the promoters sold stake via block deals in May. The company had also raised funds via QIP last December.