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Contract manufacturers like PG Electroplast delivering relatively stronger growth while at brand level, competition intensifies in consumer durable category

ICICIdirect Research 07 Aug 2026 DISCLAIMER

For Q1, RAC (i.e. room air conditioner) industry has grown ~25% YoY by value, while contract manufacturers like PG Electroplast have been able to gain market share and delivered a strong ~38% YoY growth. Similarly, the company’s washing machine revenues surged 67.2% YoY, while the electronics business (primarily PCB assemblies) recorded robust ~60% YoY growth, reflecting continued market share gains and increasing outsourcing demand. Going ahead, Management intends to grow ~30% CAGR over FY26-28E supported by low RAC base after washout FY26, refrigerators and washing machine expansion plans.
EBITDA margin moderated to 7.3% (down 78 bps YoY / up 37 bps QoQ) impacted by elevated copper, aluminium and plastic resin prices, along with rupee depreciation. However, management emphasized that absolute EBITDA per unit should remained broadly stable. Backward integration into compressor shall significantly enhance backward integration and customer stickiness. Overall, we remain positive on PG Electroplast’s execution capabilities and maintain BUY rating on the stock.
Besides, Crompton reported steady result with revenue growth of 11.2% YoY (-3% QoQ) to ₹2022 crore wherein double-digit growth was witnessed across segments including electric consumer durables, lighting products and Butterfly Gandhimathi. Management citied it lost ~₹200 crore of revenue due to supply constraints primarily in fans & lighting segment. Excluding this impact, revenue growth would have exceeded 20%, reflecting healthy underlying demand. BLDC fans segment continues to gain traction (+45% YoY). Gross margins came in at ~31.2% down 91 bps YoY and 36 bps QoQ owing to elevated input cost. Management took calibrated price hike in single digit to low double digit to pass on the increased cost.
Going ahead, we expect the company is well-placed to consistently delivering double digit revenue growth and EBITDA margin, thereby aiding profitability. Maintain BUY rating on the stock.

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