PG Electroplast: Why Did the Shares Crash 8% Today? Check the Reason

Synopsis: Shares of PG Electroplast Limited fell about 8% after the company warned that a gas supply shortage linked to geopolitical tensions in West Asia has disrupted production at its air-conditioner plants. Management said the disruption may affect FY26 revenue guidance, raising concerns among investors about near-term operations and margins.

The shares of PG Electroplast Limited, which is a leading, diversified Indian electronic manufacturing service provider and specialises in Original Design Manufacturing (ODM), Original Equipment Manufacturing (OEM), plastic injection moulding and more, dipped by 8% on March 13th as the company indicated that operational issues have arisen due to a gas supply shortage that has resulted from the geopolitical issues in West Asia. 

With a market cap of Rs 14,200 crore, the shares of PG Electroplast Ltd crashed about 8% in today’s trading session and reached a low of Rs 491. When compared to its previous day’s closing price of Rs 532.35. The shares are trading at a PE of 51, whereas their industry’s PE is at 39.3, and they have given a return of more than 1,000% in the last 5 years.

Gas shortage disrupts production

The management indicated that a week’s production has already been lost at the company’s air-conditioner manufacturing plants due to the gas shortage. LPG gas is used for bracing and welding copper tubes that are used for air-conditioners. The company indicated that it is currently exploring options for LPG gas substitutes.

The gas shortage is related to the ongoing US-Iran conflict, which has resulted in a disruption of gas production in Qatar, which is one of the biggest producers of LNG in the world. The Qatar government reportedly declared force majeure on some of its clients, resulting in a disruption of supply that is having a cascading impact on companies that depend on gas as an important input into their manufacturing process.

The company also reported that this disruption could affect its revenue guidance for FY26, although the management did not disclose the impact of this disruption on its revenue. PG Electroplast has provided revenue guidance of Rs 5,700 crore-Rs 5,800 crore for FY26, which implies a growth of 17-19 per cent over FY25, but this disruption could affect its production and sales if this situation continues.

Apart from issues related to the supply of gas, the company has also indicated that there were issues related to the costs of inputs such as the availability of polymers and a 40-50% increase in the prices of polymers. The overall issues related to production costs, revenue costs, and input costs seem to have affected the company’s stock in a negative manner.

Financials

The revenue from operations for the company stood at Rs 1,412 crore in Q3 FY26 compared to the Q3 FY25 revenue of Rs 968 crore, up by about 46 per cent YoY. Similarly, the net profit stood at Rs 62 crore in Q3 FY26, up compared to the Rs 40 crore profit in Q3 FY25.

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