PG Electroplast stock falls 6% despite clarifications on HDFC report about financial concerns

Synopsis:
PG​‍​‌‍​‍‌​‍​‌‍​‍‌ Electroplast’s shares dropped 6% after an HDFC report questioned its finances. In response, the company rejected all allegations, repeated its guidance, and explained that it is still a net-cash, profit-making ​‍​‌‍​‍‌​‍​‌‍​‍‌entity.

The shares of this leading consumer durable stock are in focus after HDFC flagged multiple concerns in the company. In this article, we will dive more into the details of this concern.

With a market capitalisation of Rs 14,908 crore, the shares of PG Electroplast Ltd reached a day’s low of Rs  521.90per share, down 6 percent from its previous day’s closing price of Rs 553.30 per share. Over the past five years, the stock has delivered a multibagger return of 3,219 percent, outperforming NIFTY 50’s return of 92 percent.

Management Comments

PG Electroplast put out a thorough explanation after a report on the HDFC Sky platform brought up worries about the company’s money situation and ability to keep going long-term. 

The management said the article had many facts wrong, didn’t match up with what the company had shared about its finances, and gave the wrong idea about the business to the public. The company cited that it has always followed SEBI’s rules about sharing information and that it tells people about all important happenings through stock exchange updates.

The management denied the idea that the company’s debt is growing or that the money coming in is getting weaker. They made it clear that PG Electroplast has more cash than debt, and this has been true for the 12 months. It added that the company has one of the best cash and debt situations in their field. They stressed that they don’t need any extra money, which goes against what the article said.

PG Electroplast hit back at claims about tightening working-capital cycles and debt-servicing gaps. The company’s leaders called these accusations baseless, pointing out that PG Electroplast still has robust operating cash flows and stays profitable even in a tough H1 FY25 market. 

Despite industry-wide hurdles, PG Electroplast made profits in both Q1 and Q2 FY26 and still boasts the best operating margins in its field. The company also stood by its full-year forecast of Rs 5,700–5,800 crore in sales and Rs 300–310 crore in profit, saying the outside worries don’t match up with how well it’s doing. Additionally, the company also stated that it may take more legal and regulatory steps if needed to safeguard its image and shareholders’ interests. 

Financial and Other Highlights

PG Electroplast reported a revenue from operations of Rs 655.37 crore in Q2 FY26, a minor growth of 2 percent as compared to Rs 671.30 crore in Q2 FY25. However, on a quarter-on-quarter basis, it declined by 56 percent from Rs 1,503.85 crore.

Regarding its profitability, it reported a net profit of Rs 2.76 crore in Q2 FY26, a significant decline of 86 percent as compared to Rs 19.33 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it declined by 96 percent from Rs 66.98 crore. 

Leading electronic manufacturing services (EMS) provider PG Electroplast Limited manufactures and assembles a variety of consumer gadgets and appliances for well-known brands.  In addition to automobile parts and PCB assemblies, its goods include kitchen appliances, air coolers, washing machines, mobile phones, LED products, TVs, and AC sub-assemblies.

The company can provide fully integrated solutions because of its excellent capabilities in advanced tool production, sheet metal parts, and plastic molding.  PG Electroplast, a Greater Noida-based company founded in 1977, provides services to Indian and foreign OEMs in the consumer electronics and automotive sectors.

Written by Satyajeet Mukherjee

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