Hi…they gave two reasons first inventory pileup for april may june qtr…second they also had to store inventory due to bis certification which would have led to less parts availability throughout the year…this backlog will get cleared in coming qtrs.
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Hello, would be great to get collaborative inputs on current results of PGEL and concall. Someone holding it through its past growth qtrs / year would be in a much better position to comment.
While there are many business levers which can help PGEL maintain their growth guidance like they cater to 35+ brands, new entry in Refrigeration, compressor manufacturing and potentially EV, but opportunity wise, has it peaked out. At 35% CAGR guidance for next 3 years, valuation is on expensive end and I personally feel chance of re-rating or higher compounding seems remote (Here if someone can give their perspective of riding high growth companies in the past and exiting because growth slowed can comment better). PGEL is usually conservative and then revises guidance but this time around, in light of other brands commentary, change of revising guidance this year seems pretty low. Other businesses will kick in only next year. Like many of you in the past, After generating decent compounding here, now I am faced with a situation of whether to trim down or exit. Stock market is a place of regret but I want to have lesser regrets if possible 
. Would be great to hear from experts in this beautiful forum. Thanks
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True, now is the time for valuation derating sadly. I believe that the company will do very well and sure, PAT will do 35% compounded for the next 3 years. That would imply PAT increasing 2.5x, but most likely share price will not go up 2.5x. Maybe 1.5-2x if we are lucky. In other words nothing like what we saw in the past.
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On technical terms, PGEL has yesterday closed below it’s 200 EMA. As mentioned earlier, we may not see the same kind of returns of what we have seen earlier. I have exited from my investment for now and would re-enter when the stock reaches around 835.
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Very poor set of numbers, I’m expecting most members in this panel to have exited the stock already. Guidance given by company also very poor.
What is your view now?
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Though its a good company however completely devestated by market operators. Growth of 40-50% never run for years until strong niche is there in business. Correct valuations are close to 12-13K cr. Heavy inventory was buit up to prepare for a strong summer season in north India. This time summer season is mere 15-20 days. All retailers and AC manufacturers are feeling the heat. It will take one year to clear inventory buit up atleast 18 months of underperformance from growth perspective. EMS forey again is questionable now as 50% tariff by US will deter any EMS export opportunity. Scary times ahead.
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I don’t think that inventory clearance will take 18 months, they will start production for next season in Q3. There will be 6 months carry forward of inventory.
There will be Zero impact of tariffs on PGEL as they are not exporting anything and doesn’t have any plans to export.
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what could be the reason for such a fall today ?
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@Agent32323 , I am still holding. This quarter numbers may not be good, but it has valid reasons, and dont have any fault of the company. A good company always bounce back. I think, long term investors need not worry. One such offbeat quarter, doesnt make company bad.
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I agree - inventory clearance will be done by Jan / Feb. Bigger issue is from Jan, there is a rating change coming in and this may have an issue with existing inventory.
Yes, long-term it’s good company but I think pain is still left Q2 & Q3 also de growth will be there in numbers, which could create some more pressure on price.
They may hit 10000Cr mark on FY27 after realising current capex plans.
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What if there is a permanent weather pattern changes in Indian Sub Continent? What if next year also summers are cool? Japan is witnessing extreme heat including europe where temperature crossing 35 C many times which is a clear sign of effect of global warming and erratic weather patterns. Rainy season is a longer one this time across Indian, China, Europe. Europe is getting more warmer in changing weather patterns. AC sales are down 40% in NCR region this time.
Major negatives Sales growth revision down to 6% from 36% annual for three years. Margins dropped from 10 to 8 % and broad changes in macro weather pattern.
This is not a high margin business and at large scale even 8% is a good margin 10% was some extra ordinary which can be achieved with a lower base.
Stock created a gap at 350 levels, high probability to test that range as current market conditions are not favourable and most probably we are entering a long bear market spell from macro perspective if US tariff issues are not resolved soon. 25% tariff hit will have a 0.1% impact however 50% will have close to 0.8% and that will force investors to recalculate Sensex valuations.
I was an early investor in PGEL at 34 levels and exited in full around 200, rest is history however markets are full of regrets. 
Holding bias has its pros and cons. Every stock has to be reassessed based on outcome of events and future outlook and decide hold, sell or buy. Especially when market favourite segment correct, pain is very high.
SyrmaSGS, Dixon, Amber, PGEL, Opiemus Infra are some good names in markets however upcoming signs may become a dot com moment if Govt is unable to avoid 50% US tariff. 25 B USD is a lost opportunity for electronics export from India and lot of that is built up in price of stocks. 8% margin business can’t command PE of 60-100 untill clear growth triggers are available for atleast 35-40% annualized Sales CAGR. World wide large EMS runs at 10-15 PE band
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Oh..so in January, everyone was sure that Global warming and el nino and what not ,was supposed to cause warmer summers and increase AC sales every year .It was a sure thing ..a secular trend etc etc. And one extra rainy season ,now Global warming is causing rain and what if summer never comes !
Wonderful the way this cult of Global warming goes on … everything can be explained by those two magic words .
Disc: Not invested .
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It’s not just PGEL … even Epack Durables had revenue degrowth and EBITDA stagnation due to AC exposure but Epack is surprisingly up since results day… potentially due to better EV/EBITDA. With PGEL new capex towards fridges, washing machines etc hopefully this intra year cyclicality diminishes.
Plus last June results were way better tha usual with a 148% increase in profits, so optically even without the early rains, this quarters results were going to be optically poor.
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I think market did not like two things -
- Guidance for FY26 significantly below competition
- Fact that promoters sold shares in June having unpublished price-sensitive information
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I see lot of frustration in the people after such a massive fall, which would have wiped the non realized profits for most of the people.
I don’t think that this fall is going to settle at 10 or 20 PE, one bad summer may not change the entire industry.
Even though monsoon is little earlier this time, it is not only the factor for AC sales drop. Spending power of consumers also at the peak in the previous summer with lot of unsecure loans etc, but now MFI, Consumable durables financing industry is at toss.
Definitely demand will come back, in addition to this product diversification will also help to decrease the product risk going forward.
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Promotor diluted 6% stake in May 25 despite knowing that season is lean, this shows a major corporate governance issue, promotor grilled on CNBC and not providing satisfying answers.
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As of now valuation of EMS players
- Amber 85 P/E
- Voltas 65 P/E
- Epack 62 P/E
- PGEL 52.8 P/E
- Virtusoso 75 P/E
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He seems tense.