PG Electroplast plans Rs 150 crore to Rs 200 crore FY28 capex

PG Electroplast Limited plans capital expenditure of about Rs. 150 crore to Rs. 200 crore in FY28, after its roughly Rs. 400 crore FY27 programme was largely completed by the October 28, 2026 call. Management said the lower outlay reflects a plan to consolidate investments made during the past two years and build business from those capabilities.

How much capital expenditure is PG Electroplast planning for FY28?

PG Electroplast is planning about Rs. 150 crore to Rs. 200 crore of capital expenditure in FY28, compared with around Rs. 400 crore guided for FY27. Vishal Gupta said the FY27 programme was on track and that a large part had already been completed by October 28, 2026. The FY28 range is management’s stated plan rather than a project-by-project commitment.

PG Electroplast’s FY28 range is Rs. 200 crore to Rs. 250 crore below the approximately Rs. 400 crore FY27 programme. Management did not disclose an allocation of FY28 spending among washing machines, refrigerators, compressors, room air conditioners, or RAC, and electronics. The disclosed comparison nevertheless indicates a lower pace of investment after two years of capability building.

Why is PG Electroplast lowering its capital-expenditure pace?

PG Electroplast said it intends to consolidate the business, focus on capital expenditure completed in the last two years, and grow from those capabilities. The Rs. 150 crore to Rs. 200 crore FY28 plan means investment is expected to continue, but with more emphasis on operating recently added facilities than on repeating the roughly Rs. 400 crore FY27 outlay.

Demand indicators cited on the call provide the operating context for that approach. PG Electroplast expects full-year washing-machine growth of about 45% to 50%, supported by a strong order book, although management said the category could enter an off-season after a couple of months. The company is therefore aiming to use added capacity through seasonal demand cycles rather than base expansion on a single quarter.

RAC is another business where management linked future growth to execution. PG Electroplast reported 36% growth in RAC in the first half, while volume growth was about 22%; for the full year, management guided volume growth of roughly 20%, plus or minus 2% to 3%. It said it had a strong order book, but that delivery in the second half would determine the outcome.

What is the status of PG Electroplast’s refrigerator project?

PG Electroplast expects its Sri City refrigerator plant to begin production in the last quarter of FY27. Management said the refrigerator business should have a margin profile similar to the company’s existing business, but it would give a more definite assessment only after production stabilises by the end of that quarter.

A refrigerator-compressor line at Sri City has not been approved as part of the FY28 plan. PG Electroplast said it is discussing technology with a couple of companies, but will decide only after refrigerator production stabilises and management has assessed market behaviour for the product. The Rs. 150 crore to Rs. 200 crore FY28 indication therefore does not confirm investment in that compressor facility.

PG Electroplast separately discussed a compressor unit whose capacity will be used largely in-house. Management said this should be margin accretive, but did not disclose an earnings before interest, tax, depreciation and amortisation, or EBITDA, margin estimate. It said it would provide that figure after production starts, probably at the end of the third quarter.

Which businesses could use PG Electroplast’s added capacity?

PG Electroplast identified RAC and washing machines as major demand areas for the expanded manufacturing base. Management said RAC revenue of more than Rs. 4,000 crore for the year should be possible, while washing-machine revenue would be near, rather than necessarily above, Rs. 1,000 crore. Those are management expectations and depend on execution of the second-half order book.

Electronics could also contribute, although management distinguished price-led sales growth from volume expansion. PG Electroplast expects full-year electronics sales of around Rs. 550 crore within a Rs. 500 crore to Rs. 600 crore range. TV motherboards contributed significantly in the first half, but higher memory prices increased the sales value of that business.

Management said second-half electronics sales would be more influenced by AC controllers, battery-management systems and closed-circuit television cameras, which have less memory content than TV motherboards. That product mix means value growth could normalise even if volumes remain decent, because the first-half electronics increase included the effect of sharply higher memory-component prices.

How does commodity inflation affect PG Electroplast’s capacity strategy?

PG Electroplast said it evaluates manufacturing profitability principally through per-unit margins rather than percentage margins. In RAC, management said the bill of materials has increased to almost Rs. 18,500 from Rs. 14,000 about two years earlier, while the amount earned for manufacturing an air conditioner remains the same. Commodity pass-through can therefore lift revenue while reducing the reported gross-margin percentage.

The company said RAC price changes and commodity movements operate through a moving-average mechanism, with the previous quarter’s average prices implemented in the next quarter. Management said required price increases had already been taken to maintain normal margins and expected further price increases from January, depending on copper, aluminium and dollar movements.

Inventory is also affected by that mechanism. Management said inventory had risen slightly because PG Electroplast was holding material for stronger orders in AC, washing machines and electronics, while raw-material prices were higher. It said it was trying to manage inventories and expected greater control in coming quarters if commodity inflation did not remain high.

Conclusion

PG Electroplast is signalling a shift from a heavier investment phase to using recently established capabilities. Its roughly Rs. 400 crore FY27 capital-expenditure programme was largely completed by October 28, 2026, while the Rs. 150 crore to Rs. 200 crore FY28 plan points to a lower outlay as management focuses on growth in RAC, washing machines, refrigerators and electronics.

The next disclosed milestone is the planned start of Sri City refrigerator production in the last quarter of FY27. Management’s decision on a refrigerator-compressor facility remains unresolved until output stabilises and market behaviour is assessed, while RAC volume growth of roughly 20%, washing-machine growth of 45% to 50%, and electronics sales near Rs. 550 crore will indicate demand for the added capacity.