PG Electroplast Receives Buy Recommendation from Anand Rathi, Target Price Set at Rs 675

PG Electroplast Sees Steady Market Share Gain Despite Industry Decline

PG Electroplast, a leading player in the RAC market, has continued to gain market share despite a decline in the industry. According to Anand Rathi's research report, the company's strong execution and rising outsourcing intensity have driven a 9% year-over-year (y/y) growth in FY26, while the industry witnessed a decline of approximately 13-14%. This growth is expected to sustain, driving a best-in-class 33.1% revenue compound annual growth rate (CAGR) over FY26-28e among RAC electrical manufacturing services (EMS) peers.

The company's ability to maintain its market share is attributed to several factors, including improved product-mix, higher PLI incentive, and backward integration. Additionally, the company's capital expenditure of Rs12 billion across FY26-27 is expected to start yielding benefits from FY28. This, coupled with normalization of net working capital (NWC) and improvement in return on capital employed (RoCE), is expected to drive a 72% profit after tax (PAT) CAGR.

Market Share Gain to Drive Superior Valuation

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Anand Rathi's research report suggests that the company's current at-par valuation compared to RAC EMS peers is expected to shift to a premium due to its superior execution, cost control, and disciplined capital allocation. The report maintains a BUY rating on the stock with a target price (TP) of Rs675, valuing it at 33x FY28e earnings per share (EPS).

Note: CAGR (Compound Annual Growth Rate) and RoCE (Return on Capital Employed) are expected to increase from FY26 to FY28e, as per the research report.