PG Electroplast , a prominent player in the Indian consumer durables manufacturing sector, reported mixed results for the second quarter of fiscal year 2026. The company faced headwinds in its air conditioner (AC) business but saw strong growth in its washing machine segment.

Key Highlights

• Consolidated revenue declined 2% year-on-year to Rs 655.00 crores in Q2FY26
• AC business revenue fell 45% due to early monsoons and GST cut announcement
• Washing machine business grew by 55%
• Company maintains FY26 guidance of Rs 5,700-5,800 crores revenue and Rs 300-310 crores net profit
• Planned CAPEX of Rs 700-750 crores, including refrigerator plant setup in Andhra Pradesh

Segment Performance

PG Electroplast's performance was a tale of two segments in Q2FY26. While the AC business faced significant challenges, the washing machine segment demonstrated robust growth:

The AC business, which accounted for about 20% of total revenue, contributed Rs 131.00 crores to the quarter's sales. The washing machine segment contributed Rs 188.00 crores, showcasing its growing importance in the company's product mix.

Factors Affecting Performance

PG Electroplast's management attributed the decline in the AC business to two primary factors:

1. Early onset of monsoons
2. Announcement of GST rate cut

These factors led to a slowdown in consumer demand and increased channel inventory levels. However, the company reportedly outperformed the industry, which saw a 25% decline in the same period.

Future Outlook and Expansion Plans

Despite the challenges in Q2, PG Electroplast remains optimistic about its future prospects:

• The company maintained its FY26 guidance, expecting revenues of Rs 5,700-5,800 crores and a net profit of Rs 300-310 crores.
• A significant CAPEX plan of Rs 700-750 crores is underway, which includes:
  • Setting up a refrigerator plant in Andhra Pradesh
  • Expanding capacities in ACs, washing machines, and coolers
  • Investments in tooling and specialized plastic moulding facilities

Management Commentary

Vishal Gupta, Managing Director of Finance at PG Electroplast, commented on the results: "This quarter and first half of FY '26 has been softer than what we have expected. Nonetheless, we have been able to grow our RAC business by around 2.5% in first half despite the industry posting almost 25% decline."

He added, "We remain optimistic that room AC business will see increased penetration-led growth with the recent rationalization of GST and we believe that in medium term, growth in room AC business will remain robust."

Conclusion

While PG Electroplast faced challenges in its AC segment during Q2FY26, the company's diversification strategy, particularly the strong performance in the washing machine business, helped mitigate the impact. The management's maintained guidance and ongoing expansion plans reflect confidence in the company's ability to navigate the current market conditions and capitalize on future growth opportunities in India's consumer durables market.

PG Electroplast , a leading player in Electronic Manufacturing Services (EMS) and Plastic Molding, reported a sharp decline in its second-quarter profits for the fiscal year 2026, as subdued demand in the Room Air Conditioner (RAC) segment impacted overall performance.

Financial Highlights

• Net Profit: The company's consolidated net profit for Q2 FY2026 stood at ₹2.38 crore, down 87.8% from ₹19.47 crore in the same quarter last year.
• Revenue: Sales declined by 2.4% year-over-year to ₹655.37 crore, compared to ₹671.30 crore in Q2 FY2025.
• EBITDA: Earnings before interest, tax, depreciation, and amortization (EBITDA) decreased by 26.2% to ₹44.68 crore, with the EBITDA margin contracting to 6.8% from 9.0% in the previous year.

Half-Year Performance

For the first half of FY2026:

• Net sales grew by 8.4% to ₹2,159.22 crore
• EBITDA decreased by 5.6% to ₹184.10 crore
• Net profit declined by 33.8% to ₹69.09 crore

Segment Performance

• The Product business, contributing 68.4% of overall revenues, grew by 9.2% year-over-year.
• Within this segment, Room ACs grew by 2.5%, while Washing Machines saw a robust growth of 46.9%.
• The Coolers business experienced a decline of 19.7%.

Subsidiary Performance

PG Technoplast, a 100% subsidiary, reported revenues of ₹296 crore, impacted by soft demand in the RAC business.

Management Commentary

Vishal Gupta, Managing Director - Finance, stated, "Sales performance in the first half of FY26 was impacted by subdued demand in the Room AC segment, resulting in moderated growth. However, underlying demand indicators remain healthy, and the recent reduction in GST rates is expected to enhance product affordability and accelerate category penetration over the medium term."

He added, "Capital efficiency continues to be a key operating principle, with all capital allocation decisions guided by sustainable profitability and value-accretive metrics. While near-term growth momentum may moderate, the medium to long-term outlook remains positive."

Operational Highlights

• Cash and equivalents stood at ₹630 crore at the end of Q2 FY2026.
• Operating cash flows were impacted by higher inventory levels in H1 2026.
• The company continues to focus on working capital efficiency.
• Capacity expansion at Bhiwadi and Supa plant for the Room AC business is on track.

Future Outlook

PG Electroplast remains committed to:

• Controlling expenses
• Building long-term resilience
• Enhancing capital efficiency
• Investing in R&D, new product development, and backward integration
• Strengthening product offerings across AC and Washing Machine segments

The company maintains a positive long-term outlook despite near-term headwinds, citing strong engagement from both existing and new clients.

Financial Guidance for FY2026

• Consolidated Revenues expected at ₹5,700–5,800 crore, implying growth of 17% to 19% over FY25
• Net Profit Guidance: ₹300–310 crore, a growth of 3%–7% over FY25
• Product business (Washing Machines, Room ACs, Coolers) expected to grow 17%–21%, reaching ₹4,140–4,280 crore

The company plans a capex of ₹700–750 crore for FY2026, focusing on new projects including facilities for plastic components, coolers, washing machines, and expanded AC capacity.

Despite the challenging quarter, PG Electroplast remains focused on long-term growth strategies and operational efficiencies to navigate the current market conditions.