PG ELECTROPLAST:
PGEL specializes in Original Design Manufacturing (ODM), Original Equipment Manufacturing (OEM) and Plastic Injection Molding, catering to 30+ brands
The Company has grown ~2.7 times in five years at 22% CAGR. EBITDA has grown at 20% CAGR. Capex done is last 5 years is ~ INR 220 Crores.
Business Breakup:
Plastic moulding contributes 60% in PGEL’s topline followed by product sale, electronics, mould manufacturing & others contributing 27%, 6%, and 7% respectively.
Plastic moulding includes plastic body for
consumer appliances such as washing machines, ACs, refrigerators, ceiling fans and sanitary ware products. Under Product segment, company provides ODM services for Air cooler, washing machines and ACs.
PGEL’s AC manufacturing capacity includes 1.25lakh units/month of IDU and 50,000 units/months of ODU. Company is also going to manufacture control assemblies for IDU/ODU, cross flow fans, heat exchangers, sheet metal components, plastic moulding components all under PLI scheme.
PGEL envisaged capex of 320 crore over next five years for manufacturing AC components under the PLI scheme. Company has guided PLI revenues to start flowing from FY23 onwards.
115 Cr Capex is expected in FY22 in PGTL, a 100% subsidiary for AC component manufacturing. Company is confident of touching minimum incremental revenue target each year under PLI guideline (i.e. 250 Cr, 500 Cr, 750 Cr,
1000 Cr & 1250 Cr through FY23 to FY27)
The good:
🔎Despite passing on PLI benefits to customers, the company is likely to maintain EBITDA margin at 7% due to increasing revenue from ODM services
🔎Plastic moulding & Product sales together account for 87%. Both are likely to grow at high CAGR (~15% & 50%).
The bad:
🔎No entry barriers in third party manufacturing
🔎Higher dependence on seasonal products, RM price fluctuations
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