Why PG Electroplast Share Dropped 10% After Nuvama Price Target Cut
PG Electroplast shares dropped sharply this week. We watched them fall nearly 40% in just four days. The decline was triggered by a sharp cut in FY26 projections and a notable fall in net profit. Similarly, in Q1, revenue increased by 14 percent to 1,504 crore and net profit fell by 21 percent to 67 crore. Nuvama slashed its target price to ₹710 from ₹1,100, a reduction of 35%.
We saw weak seasonal demand for room ACs, high inventory levels, and lots of order cancellations. These pressures led to lower earnings estimates. In the coming sections, we will break down what happened, why investors reacted so sharply, and how the company’s recent numbers and outlook explain this fall.
Company Overview
PG Electroplast Ltd is an Indian company engaged in providing electronics manufacturing services (EMS). It works on OEM and ODM projects. The company makes parts for brands in appliances like room ACs, coolers, and washing machines.
We’ve seen it grow steadily, partly because India still has low penetration in its key categories.
Event Recap: The Sharp Drop
On August 8, the stock dropped 23% immediately after PG Electroplast slashed its FY26 growth guidance. In Q1, net profit declined 21% year-on-year to ₹67 crore, compared to nearly ₹85 crore in the same quarter a year ago. Then on Monday, shares fell another 15%, taking the two-day fall to roughly 30%. Over four sessions, the total slump hit nearly 37%.
Nuvama’s Price Target Cut: Details & Rationale
Nuvama sharply lowered its EPS estimates for FY26–FY28 by 36%, 25%, and 10% respectively. The target price was cut from ₹1,100 to ₹710. Reasons? Weak demand for room ACs, poor operating leverage, high inventory, and extra interest costs weighed down the outlook.
Financial Performance Analysis
In Q1, revenue rose 14% to ₹1,504 crore. That’s decent top-line growth. But profit dropped sharply. Net profit stood at ₹67 crore, reflecting a 21% drop from last year and a 54% decline compared to the previous quarter.
The firm also trimmed its FY26 guidance: revenue growth now 17–19% (was 30%), and PAT guidance slashed to ₹300–310 crore (was ₹405 crore).
Sector & Macro Factors
We are feeling a slowdown in seasonal demand. The early monsoon muted room AC sales.
The large stockpiles held by channels and brands remain a concern. Analysts point out that this challenge is affecting the entire industry.
All this hit margins and cash flow, especially under a tough macro backdrop.
Technical Analysis: Resistance & Support Zones
Technical analysts identify ₹545 and ₹508 as the nearest support levels. If the stock tries to recover, it may face resistance in the ₹690–₹727 range.
The sharp sell-off on heavy volumes signals weak technicals, so traders are cautious.
Implications for Investors (Factual Outlook)
This drop highlights how sensitive the market is to earnings and guidance cuts.
Future recovery depends on clearing inventory, stronger seasonal demand, and better margin control.
But until those signs return, the outlook remains fragile.
Conclusion
The nearly 40% fall in PG Electroplast’s share price reflects a mix of weak profit results, a steep downgrade in guidance, seasonal softness, and technical breakdown.
We now wait to see if demand picks up in the festive season, inventory levels fall, and margins improve. That will determine whether the stock can stabilize and recover.
FAQS:
PG Electroplast is falling because profits dropped, future growth targets were cut, and demand for air conditioners slowed. Investor confidence was also hit by excess inventory and increased costs.
After reporting weak results and cutting growth forecasts, Nuvama reduced PG Electroplast’s price target from ₹1,100 to ₹710. This reflects softer demand and higher business challenges.
With declining profits, soft demand, and negative sentiment, PG Electroplast currently appears to be a risky investment. Experts suggest waiting until demand improves and growth trends become clear.
Disclaimer:
This content is for informational purposes only and not financial advice. Always conduct your research.