PG Electroplast Ltd Q4 FY26 Earnings Call: Flags Rs 420 Cr Revenue Loss from March Disruptions, Targets 8% EBITDA Margin in FY27

PG Electroplast Ltd held its Q4 FY26 earnings call on May 19, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Results & Key Metrics

• Q4 FY26 revenue declined 10.4% YoYto Rs.1,717 crores, with EBITDA falling 43% to Rs.131.54 crores and PAT dropping 56% to Rs.64.2 crores.
• Full-year FY26 revenue grew 8.6%to Rs.5,288 crores (FY25: Rs.4,869 crores), though EBITDA contracted to Rs.441.76 crores (from Rs.519.16 crores) and PAT fell to Rs.193.61 crores (from Rs.290.92 crores).
• Without March 2026 disruptionsmanagement estimated Q4 revenue would have crossed Rs.2,100+ crores, citing an aggregate ~Rs.420 crores revenue loss from the LPG crisis and truck/diesel shortage.
• Goodworth Electronics JV posted Q4 FY26 revenueof Rs.155.1 crores (vs Rs.107.6 crores YoY) with EBITDA improving to Rs.6.19 crores (vs Rs.0.94 crores).
• Total AC production for FY26was 1.75 million sets (IDU + ODU) plus 200,000 additional IDUs; annual manufacturing capacity stood at 4.5-5 million units with average utilisation of 45-50%.

March 2026 Shocks & Macro Challenges

• The RAC industry saw a ~15% decline in FY26driven by multiple demand-side shocks: early prolonged monsoon in Q1 FY26, the GST rate cut announcement (Aug 15, 2025) stalling sales, and BEE rating transition delaying production in Dec 2025.
• A commercial LPG shortage from the Gulf conflictforced nearly two-week plant shutdowns in March 2026, triggering reverse labour migration and disrupting production ramp-up at exorbitant energy transition costs.
• A truck/diesel shortage in March 2026delayed dispatches, causing an additional ~Rs.120 crores in revenue loss on top of the ~Rs.300 crores lost from the LPG crisis.
• Supply-side headwinds includedsharp commodity price rises (copper, aluminum, plastics), Indian rupee depreciation of ~20% YoY against the USD, and cumulative industry price hikes of 10-15% (Dec 2025–Apr 2026) being only partially passed through.
• Consumer spending confidence declined meaningfullyas inflation in essential categories reduced disposable income throughout FY26.

RAC, Washing Machine, Cooler & JV Trends

• FY26 RAC revenue grew 9% YoYdespite the ~15% industry decline; management estimated total India AC manufacturing industry volume at 13-14 million units, with PGEL holding ~12-14% market share.
• Washing machine business surged 52%for full-year FY26 and 70% in Q4 FY26; management expects 30-35% growth in FY27.
• Cooler business declined 8.2%for full-year FY26.
• Channel inventory normalisedfrom a peak of ~5 million units in FY26; April-May FY27 sell-out momentum was significantly higher YoY.

Compressor, Refrigerator & Capacity Expansion

• FY26 total capex was Rs.785 crores, comprising Rs.500 crores in land & building (washing machine campus in Greater Noida, refrigerator campus in Sri City, compressor building at NGM Supa, 72-acre land in Kamargaon, 8-acre campus in Salarpur) and the balance in plant & machinery across businesses.
• Management guided to FY27 capex of ~Rs.400 croresand expects a 4x asset turnover by FY29 from the new facilities.
• Rotary compressor facility at Supa— operations targeted by Q4 FY 2026-2027, initial capacity of 2 million units (expandable to 4 million); project delayed by 18 months with capacity numbers expected in FY 2027-2028; management targets >70% utilisation in the first full year.
• Refrigerator facility in Sri City— commercial production targeted by Q4 FY 2026-2027, meaningful revenue in FY 2027-2028; management expects 50-55% capacity utilisation in the first full year, supported by an anchor customer and side-by-side models.
• Compressor plant BOM mix— management expects 60% localisation and 40% imports; no government approvals required as it is a standalone venture (no JV).

Gross Margin, Forex & Pricing Actions

• Gross margin declined ~260 bps YoY in Q4 FY26— management attributed this to utilisation of low-cost inventory in Q3 FY26, slow Jan-Feb sales, inability to fully pass on raw material costs and rupee depreciation, and energy transition costs from LPG to expensive fuel sources.
• Full-year FY26 forex loss was Rs.38.77 crores(vs a gain of Rs.17.99 crores in FY25); unhedged liabilities marked at Rs.94.8 per USD, with the rupee further depreciating to Rs.95.5 by May 2026.
• Management hedged $15-20 million at Rs.93 per USDand implemented price hikes of 10-12% in April 2026 (Q1 FY27), which have mostly covered cost inflation through Apr-May; volatile commodities and rupee depreciation remain risks.
• PLI for FY25-26 totals Rs.71 crores(to be recognised in FY26-27); AC PLI for FY27 remains at Rs.37.5 crores and for FY28 guided at Rs.50 crores.
• Total inventory as of March end FY26stood at Rs.1,600 crores (AC business: Rs.1,300 crores including Rs.450 crores finished goods); management targets reducing total inventory to below Rs.900 crores by June end FY27.
• Management aims to restore EBITDA per AC to FY24-25 levels, potentially in H2 FY27, subject to industry dynamics.

Growth Targets, Guidance & Key Uncertainties

• Management declined formal FY27 revenue or PAT guidance, citing dynamic conditions, but expects "decent growth" over the low base of FY26 with normalized channel inventory.
• Management targets EBITDA margins improving towards 8% in FY27as operating leverage returns; hopeful of crossing FY25 PAT of ~Rs.270 crores if the macro environment normalises.
• RAC secondary sales volume growthexpected at least in line with industry in FY27; April-May FY27 sell-out significantly higher YoY, though June performance is pending monsoon impact;FY26 RAC sales were nearly zero from June to October due to the GST rate cut announcement.
• Vishal Gupta flagged a PLI-related risk— FY 2027-2028 is the last year for PLI target achievement for all brands, causing "desperation" among some brands behind their targets, which may put pricing pressure on the industry.
• Key risks cited— Middle East geopolitical situation, El Nino impact, steep energy price increases, rupee depreciation beyond Rs.97, inflation, and consumer sentiment.