PG Electroplast Ltd (NSE: PGEL) Q2 2025 Earnings Call dated Nov. 11, 2024
Corporate Participants:
Vishal Gupta — Managing Director, Finance
Pramod Gupta — Chief Financial Officer
Analysts:
Deepak Agarwal — Analyst
Vipraw Srivastava — Analyst
Achal Lohade — Analyst
Arafat Saiyed — Analyst
Yash — Analyst
Ashish Kumar Singh — Analyst
Nilesh Patil — Analyst
Komal Iyer — Analyst
Jalaj — Analyst
Basant Bansal — Analyst
Jeevan Garg — Analyst
Parth Shah — Analyst
Bhagyavanath Reddy — Analyst
Pratap Maliwal — Analyst
Mythili Balakrishnan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the PG Electroplast Limited Q2 FY ’25 Conference Call hosted by JM Financial. [Operator Instructions]
This presentation contains forward-looking statements based on the currently held beliefs of the management of the company which are expressed in good faith and in the Management’s opinion are reasonable. The forward-looking statement may involve known and unknown risk uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the company or industry to differ materially from those in forward-looking statements. These forward-looking statements represent only the company’s current intentions, beliefs and expectations and any forward-looking statement speaks only as of the date on which it was made. The company assumes no obligation to revise or update any forward-looking statements. [Operator Instructions]
I now hand the conference over to Mr. Deepak Agarwal. Thank you and over to you, Mr. Deepak Agarwal.
Deepak Agarwal — Analyst
Thank you Seema. Good afternoon, everyone on behalf of JM Financial. I welcome you all to PG Electroplast Q2 FY ’25 earnings conference call. Today we have with us Senior Management represented by Mr. Vishal Gupta, Managing Director; and Mr. Pramod Gupta, Chief Financial Officer.
So, without taking much of your time, I would like to hand over the floor to the Management for the opening remarks, post which we can open the floor for Q&A. Thank you and over to you sir.
Vishal Gupta — Managing Director, Finance
Thank you. Thank you, Deepak. Good evening everyone. Thank you for sparing your valuable time and joining this call today. Hope all of you are doing well. I’m accompanied by Mr. Vikas Gupta, MD, Operations; and Mr. Pramod Gupta, our CFO on this call. We have already shared the presentations of our results earlier in the day and hope you have gone through that.
Second quarter of FY ’25 has been another strong quarter in the growth journey of PG. The company has got a good traction in its product business and other segments also have ramped up very well. The company has posted robust quarterly profits and sold sales growth in this quarter. Operating revenues for the company grew by 46% and crossed INR670 crore with the product business contributing a 54% share in the operating revenue. EBITDA also increased by around 55% and stood at INR60.5 crore and net profits rose by 57% to stand at INR19.5 crore.
In first half of FY ’25 the company has posted industry leading growth in the product businesses and operating revenues for the product businesses were INR1,355 crore with 119% growth. The room AC business contributed INR1,118 crore which is a 143% growth on Y-o-Y basis. The washing machine business also has grown by 41% on a Y-o-Y basis and air cooler business has also grown by 267% on Y-o-Y basis. Order book and visibility for product business remains very robust and the company is on the track to accelerate product business growth significantly in FY ’25.
Our new product offerings in washing machines and room ACs and air coolers have received very good response. The company is focusing its efforts towards developing products that helps it maintain cost leadership while striving for product leadership too. The company continues to see increased interest in the business from new and existing clients and we remain very confident about the future growth prospects of our business.
For FY ’25 our revised operating revenue guidance is at least INR4250 crore in PG Electroplast and another INR600 crore in our JV company Goodworth Electronics implying INR4,850 crore of operating revenue as a book which is a growth of around 77% growth on FY24 numbers. We are also revising our guidance for net profit to at least INR250 crore which is a growth of around 83% over FY ’24 net profit of INR137 crore. The growth in product businesses that is washing machine, room air conditioners and air coolers is expected to be around 78% from INR1,668 crore to around INR2,975 crore.
Capex guidance stands at around INR370 crore to INR380 crore and the progress on all infra and capacity expansion is going on as planned. The company is on track to meet the capacity expansion guidance for the current year. I would like to reiterate that company remains committed to improving capital efficiency by improving asset terms through product business growth and we aim to deliver industry-leading growth with best-in-class return ratios in the coming years.
With this now I would like to hand over the call to my colleague Mr. Pramod Gupta, our CFO to elaborate on the financials. Thank you.
Pramod Gupta — Chief Financial Officer
Hello and good evening everyone. I am sure all of you have seen the Financials in detail already. We have had great scale up during the first half of FY ’25 from an operation point of view in a very challenging supply chain environment. The company has done excellently well. The ASPs in RAC, washing machine and coolers were down due to lower commodity price during the period and availability of critical component was also a challenge due to import supply chain becoming more onerous.
We have posted industry leading growth in RAC in revenues of 143% in the first half and 41% in washing machines. The company’s operating revenue for first half are up 75% Y-o-Y at INR1,992 crores. EBITDA grew 80.7% at INR195 crores and net profit was up 126% to INR104.4 crore. During the first half operating margins improved due to cost control, low commodity prices and operating leverage.
On the balance sheet side, the net debt stands at INR238 crores at the end of first half due to inventory stocking up for upcoming AC season. And as stated by Vishal ji, we have guidance of INR370 crores to INR380 crores of capex in FY ’25. And again I want to reiterate that improving capital efficiency by sweating our existing and new assets will be the key focus area of the company in the coming years and all our existing expansion plan are on track and the infrastructure and plant and machinery which is being planned for this year is likely to come on time for the capacity expansion that we have planned this year.
We remain very optimistic on the growth opportunities in our areas of focus and we believe the company is well-placed to expand its market presence and market share further in the coming years.
With this, I will now like to open the floor for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. [Operator Instructions] We take the first question from the line of Vipraw Srivastava from PhillipCapital. Please go ahead.
Vipraw Srivastava
Hi. I’m audible, right?
Operator
Yes sir.
Vipraw Srivastava
Yeah, just first question on the IT PLI, I mean what’s the progress there? The management was stating that quarter back that they would be sharing some news but again any updates, because recently there are some news articles also that players are struggling to meet the targets only first on IT PLI.
Vishal Gupta
So please understand regarding the IT Hardware PLI scheme, the government is still trying to figure out how to restrict the import of IT Hardware products into the country. Once that is aligned and in place then we should see some kind of traction for moving of manufacturing from overseas locations to India and we are not able to see much of a movement in the industry right now. There are more than 26 — 28 companies under this IT Hardware PLI 2.0 and most of those companies have not been able to tie up any business. So we are working with the government to see how to regulate and restrict the import of IT Hardware products so that the local manufacturing can gain some momentum.
Vipraw Srivastava
All right. And sir, secondly on the TV business, obviously this year you are bound for a very good healthy growth INR600 crore target. But going ahead, I mean how do you see the TV business progressing? Do you face — do you see competition? Because one of your peer is saying that the TV outsourcing market is almost over. What was your thoughts on that? I mean do you see a good opportunity in the TV outsourcing market. Any thoughts on that?
Vishal Gupta
Sir, please understand we are seeing a very strong momentum. Please note that we have a very small base as compared to other competitors and we are seeing a very strong growth in our numbers for television business. We are confident of maintaining that momentum going forward as well in FY ’26 as well. And we are already working on certain new platforms in televisions and we are in process of acquiring more clients. So we are confident about the numbers for TV. Definitely the business is very competitive. So we need to maintain a very tight and lean cost structure for that.
Vipraw Srivastava
Fair enough. And sir, finally, last question on the AC business. I mean obviously last year was very good with the summers around 20% volume growth was there. But this year, what kind of volume growth are anticipating for the industry in next summer cycle, which is in 2025? And any thoughts on that?
Pramod Gupta
We feel strong momentum continuing at least till March. And after that actually how the monsoon season pans out and how things happen will actually decide the course of growth. But at least till March the order book is very, very strong. And based on that order book only, we have been revise — we have been able to revise our guidance upwards. So if you see, we have revised our revenue guidance and bottom line guidance very significantly by almost more than 15%, and that is largely due to very strong product business, overall product business momentum that we see in coming months.
Vipraw Srivastava
Thank you. Thanks a lot. Thank you.
Pramod Gupta
Thank you.
Operator
Thank you, sir. The next question is from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Achal Lohade
Yeah. Good evening, gentlemen. Thank you for the opportunity. Congratulations for great show. The first question I had, if you could give a — while you have given for the first half the growth, if you could spell out for the second quarter specifically what has been the growth across key categories.
Pramod Gupta
Yeah, I’ll just give you those. So in AC, we had a growth of 212% on a Y-o-Y basis for the quarter. For the washing machine, the growth stood at 23% and for the coolers, the growth was 191%.
Achal Lohade
Understood. Sir, if you could also give us the mix from the molds, plastic molding, and tools?
Vishal Gupta
The plastic molding business was about INR229 crore and the electronics business was about INR80 crores.
Achal Lohade
Understood. So if I look at INR229 crore, that’s a extremely strong number. So if you could guide us, what has driven this? And how do you see this particular segment for the full year? Because I see that part of the upward revision is also driven by molds — plastic molding business.
Vishal Gupta
So this quarter we had some — it is not only plastic molding, it is plastic molding and others. So we had some new client addition in some of the other segments including some sheet metal components, etcetera. And in the off-season, we have a spare capacity which we try to utilize for supplying components to the industry. In this business, we are seeing a good growth. But please don’t extrapolate 44% kind of a growth. It will be more like 20%-ish growth on a full-year basis on this business.
Achal Lohade
Understood. And in terms of the incentives, if you have booked anything in second quarter and if yes, what is the quantum?
Vishal Gupta
No, there is — been no incentive which has been booked in the second quarter. We’ll book the incentive as and when we receive it and we will inform when we actually book incentives.
Achal Lohade
Understood. And in terms of the RAC growth you mentioned 212%. What would be the industry number according to your estimate, sir, for the second quarter?
Vishal Gupta
Typically the second quarter may be probably close to 35% to 40% for the industry. But for us last year second quarter had a very low base because of the early monsoons and there was a channel inventory which was there in the last year, last season. So I mean the absolute numbers are not large. In fact, if you see last full year, like in the full quarter, in the second quarter we just had INR75 crores of sales. This year we had about INR235 crores — INR236 crores of sales in the fourth — in this quarter. So basically the numbers are not very large. In first quarter we had INR882 crores of sales in the AC business. Correct.
Achal Lohade
So ideally one should look at first half or in fact ideally trailing 12 months, is that right?
Vishal Gupta
Yes. Yeah, ideally trailing 12 months is a better metrics to look at, at any point in time.
Achal Lohade
Perfect. Sir, in the same context, if you could give for us versus the industry, what would that number be?
Vishal Gupta
I mean, I don’t have the full numbers of the industry. I’m just putting a best guess that probably the industry has seen a growth of about 40%, 45%. I’m saying the overall market in the sense that retail sales, etcetera, maybe outsourcing industry would have seen a higher growth because last year as I was telling you that there was a very low inventory. So this year some amount might have gone in inventory and channel filling, et cetera also.
Achal Lohade
Right. Understood. And any new client addition across the segment apart from the plastic moldings and any other segment we have seen client addition?
Vishal Gupta
We continue to add clients and we have seen some good client addition, but we don’t make announcements on the client addition during the quarter.
Achal Lohade
Understood. And just last question if I may. How do we see the margins? I mean for first — for FY ’25, you have given the guidance, I appreciate that in terms of PAT. But if one were to look at from a margin perspective basis, what growth expectations, what we have across categories? Do you see margins improving, margins remaining stable, or any impact on the margins for next, let’s say two to three-year perspective?
Vishal Gupta
Margins should be in the similar range as they are today. And as I have been explaining, actually for us the percentage margin is not the key driver. Typically it is the per unit margin in absolute amount that we actually get. And that is what we look into when we are doing the business. And that remains the key focus because commodities are a pass through and there’s always, up and down prices are happening in the sense the movement is happening on the commodity. So on those basis we think that the margins should remain largely stable for us in absolute amount per unit.
Achal Lohade
Understood. And any comment you would like to add in the electronics segment in terms of how do you see it growing?
Vishal Gupta
Yeah. So electronics business also, we are seeing a very strong growth. In fact this quarter, if you see our electronics business grew almost 700% on a year-on-year basis, apart from TV. So TV business has actually gone into good work, the 50% JV and the ex of TV business, we are seeing a very strong traction and some of the revision which we have done on the sales is also an account of a high growth which we are experiencing in our non-TV electronics business. So, we continue to see and scout from new businesses there and we are seeing some success, early success in that side of the business.
Achal Lohade
Great. And this margin in this segment would be similar to the company-level margins, or could be higher?
Vishal Gupta
No, no. The TV like — the electronics business margins are typically very low in the range at the EBITDA about 2% to 4% at best.
Achal Lohade
Got it. That’s helpful sir. I’ll fall back in the queue for more questions. Thank you so much.
Vishal Gupta
Thank you.
Operator
Thank you. [Operator Instructions] We take the next question from the line of Arafat Saiyed from InCred Research. Please go ahead.
Arafat Saiyed
Yeah. Hi, sir. Thanks for taking the question. I’m audible?
Vishal Gupta
Yes, you are very much audible.
Arafat Saiyed
Yeah, sir. Congrats on a great set of numbers once again, sir. I have a couple of questions, sir. Can you just give me the breakup of capex up to INR370 crores, INR380 crores which we discussed? And how much we already did? And balance where and how you’re going to spend? And also how you’re going to fund this capex?
Vishal Gupta
Yeah. So we have out of INR370 crores, INR380 crores capex we are putting up about close to INR165 crores in the product business for expanding the capacities, and this will be for the plant and machinery in the product side of the business. About INR185 crores will be going into the acquisition of land and making of buildings which is the infrastructure side and the rest will be about INR20-odd crores which we are expecting to invest in some basically maintenance capex as well as some small capex on the plastic component side, especially on the sanitary wear.
Now, this is the breakup. [Technical Issues]
Operator
Hello sir, we lost your audio. Pramod sir, can you hear me? Participants, please stay connected while we reconnect the management.
Pramod Gupta
Hello?
Operator
Pramod, sir, we lost your audio sir.
Pramod Gupta
Am I audible?
Operator
Yes, sir.
Pramod Gupta
Yeah. So that has already been spent. Rest is we are on track and as and then we kind of reach the milestones those payments will be made to the vendors and the suppliers which are supplying this capex are doing — making the infrastructure.
Arafat Saiyed
Got it, sir. And sir, my next question on JV with China for laptop. So how is that progress over there? And what kind of growth you’re looking for next couple of years and where you reach in that segment?
Vishal Gupta
Sir, please understand, as I told to the earlier caller, also regarding IT hardware on the laptop manufacturing, as of now we are not seeing any kind of movement happening among all the players of IT hardware. And that is mainly because the government is still not able to figure out the way to how to restrict the import of IT hardware into India. Once that mechanism is in place, then we can see some kind of traction in momentum towards shifting of manufacturing from overseas countries to India. So till now, we are not seeing much of that. But in the meantime, we are preparing our infrastructure and we are trying to see how we can leverage that opportunity as and when it comes.
Arafat Saiyed
Got it, sir. And sir, as you discussed that looking for PAT of INR250 crores. So what is the PLI including in that?
Pramod Gupta
That will be just INR30 crores.
Arafat Saiyed
INR30 crores only. Okay, fine. Got it, sir. Thanks. That’s it from the side.
Pramod Gupta
Thank you.
Operator
Thank you. The next question is from the line of Yash from Stallion Asset. Please go ahead, sir.
Yash
Hi, thank you for the opportunity. My first question was on the fundraise that you’ve announced. I think it’s about INR1,500 crores in the board meeting. So it’s a significant amount and I just want to understand how will this money be deployed?
Vishal Gupta
So this is the total — also limit of about INR1500 crores. That the — basically that’s the amount that we have taken the upper limit as from the board and even from the shareholders we are seeking the permission for that to IT. We are seeing some very significant growth opportunities coming our way. And if as and when they kind of materialize, we will be utilizing that money for capex and working capital. In fact, this year itself, the growth has been much higher than what we initially anticipated. And in fact, a significant amount of last year’s QIP amount that we raised has actually gone into the or is actually getting deployed in the working capital side there. So now when, as — when these new growth opportunities which we are focusing on, they materialize, we will require money for both capex as well as the working capital. And so for that we are actually — we have taken the permission and we are hopeful that if some of them are going to materialize in coming months, then we will be able to raise the QIP and utilize that money for those opportunities.
Yash
Okay. So will you be planning any inorganic equation in that amount?
Vishal Gupta
No. We are actually looking at largely only organic growth opportunities. We are not looking at any inorganic initiative.
Yash
Okay. Got it. Thank you.
Operator
Thank you. We take the next question from the line of Ashish Kumar Singh from Vyom Wealth Advisors. Please go ahead.
Ashish Kumar Singh
Hello, sir. Am I audible?
Vishal Gupta
Yes, yes very much.
Ashish Kumar Singh
Sir, congratulations on the good set of numbers. Sir, my question is on this fundraise itself. Sir, you talked about having those funds beforehand and getting into the new growth opportunities. Sir, can you tell us about the industries that you are looking in the product line? Any guidance on the product line which you are looking in the future?
Pramod Gupta
The product lines will be similar to what we are doing. They will actually be some of the expansion will be maybe some backward integration in some of the categories where we are working. We are also evaluating one or two new categories in the consumer durable side of industry only.
Ashish Kumar Singh
Okay. And sir, as earlier you also mentioned that the government is not ready as of yet for the IT Hardware part. But do you expect the government to be ready with something in the future? And do you have any plans to expand into that if there is some opportunity there?
Vishal Gupta
So please understand, we are also closely following up with the government and we are hoping that there will be some kind of policy guidelines and we are putting up a infra in place to see if as and when the opportunity is there, we are able to harvest that.
Ashish Kumar Singh
Okay. Okay, sir that was all. Thank you for answering all the questions.
Operator
Thank you, sir. [Operator Instructions] We take the next question from the line of Nilesh Patil from ICICI Securities. Please go ahead, sir.
Nilesh Patil
Yeah. Hi. Thanks for the opportunity. Hope I am audible.
Pramod Gupta
Yeah, very well, please go ahead.
Nilesh Patil
Yeah. Hi sir. Congrats on a great set of numbers. Sir, my question is on the possibilities of entering into other segments, as you mentioned in the previous question, that you may consider entering into some other consumer durable segments. So any specific government kind of guidance over that, what kind of opportunities we may look for?
Pramod Gupta
We are in the evaluation. As and when we decide to go ahead, we will make an announcement.
Nilesh Patil
Sure. Okay. And so hope I expect these segments to kind of have a similar return ratios and asset returns to its the existing business?
Pramod Gupta
Yes, we have a very strong guardrails in our company. We don’t actually take up any new project unless we — those both projects meet our internal ROC targets. So we rest assured that any new capital allocation will be done only if maybe opportunity to make significant ROC which is significantly higher than cost of capital. And basically, we will maintain those capital efficiency norms that we have put in our company.
Nilesh Patil
Thank you. Sir, my second question is that you have guided on the revenue visibility and profitability so and you have indicated that you will be sweating the assets. So any guidance on — you can share any band on asset terms that you are looking for.
Pramod Gupta
So, I’m sure you’ll appreciate but by the end of the year a lot of the capex that we are doing right now is going to get capitalized and we are going to see an increase in the overall net and gross fixed asset base. And therefore we think that given the guidance that we have given and the kind of capitalization we are going to see, overall a similar number as it is today which is about 4.5 times to 5 times on the net fixed asset side that should be the range which we should be able to maintain for the net fixed asset turn in our company.
Nilesh Patil
Thank you. Thank you very much.
Operator
Thank you. [Operator Instructions] The next question is from the line of Komal Iyer from NBG Investments. Please go ahead.
Komal Iyer
Good evening, sir. Could you help me understand what is the reason for the drop in the revenue on a quarter-on-quarter basis?
Vishal Gupta
Ma’am, this is actually a seasonal business. The AC revenues are typically high in first and the fourth quarter of a year and second and the third quarter are typically low season for us for manufacturing of AC and AC is almost right now about 48%, 50% of our revenues on a yearly basis. So therefore because of that seasonality, we see a drop every year in the second and the third quarter vis-a-vis first and the fourth quarter.
Komal Iyer
So we are so optimistic about business, despite the 50% drop in the Q-on-Q, you have still revised your guidance upwards.
Pramod Gupta
So, ma’am, the season — seasonality plays out every year. It doesn’t matter quarter on quarter, how you see, I mean we look at the business on a year-on-year basis only. So every year in quarter two and quarter three, the utilization of the plant and the production drops. We don’t have anything — I mean control over that. I mean obviously, ACs are not selling in that season. So nothing can be done.
Komal Iyer
Okay. Thank you, sir. Thank you so much.
Operator
Thank you. The next question is from the line of Vipraw Srivastava from PhillipCapital. Please go ahead.
Vipraw Srivastava
Hi, I’m audible, right?
Pramod Gupta
Yeah, very much. Please go ahead.
Vipraw Srivastava
Thanks for allowing me a follow-up question sir. I mean obviously, you are into PCB Assembly also, but I mean the Government of India is now coming up with a PLI components which will be a backward integration for EMS players. So I mean, any thoughts on that? Any sort of backward integration you’d be doing lets say your number is doing bear boats also. Something on those lines, is there a thought process about that, or it’s still a long way?
Vishal Gupta
Please understand. We are also keenly waiting for the announcement of the electronic components PLI scheme. Once we have that, we will try to go through that and we will be looking at what are the opportunities that we can look at. Definitely, we have certain set of guidelines, or guardrails for our investments. We’ll try to see if we can fit into some kind of investments in those guardrails, we’ll definitely like to pursue that.
Vipraw Srivastava
Okay, thank you. And so secondly, I mean this year you are having INR30 crore PLI as your — in the financials and FY ’26 roughly if you can give an idea what would be your PLI number if you have an idea?
Pramod Gupta
That will be about INR37.5 crores.
Vipraw Srivastava
FY ’26, right?
Pramod Gupta
Yes. This year FY ’25 it is INR30 crores and next year it is INR37.5 crores.
Vipraw Srivastava
Okay. Thank you.
Operator
Thank you. [Operator Instructions] We take the next question from the line of Jalaj from Svan Investments. Please go ahead.
Jalaj
Yeah. Am I audible?
Vishal Gupta
Yes, you are audible. Please go ahead.
Jalaj
Yeah, first of all, congrats on a great set of numbers. So I had one question with regards to the margins for the balance of the year, that is the H2. So if I do a backward — that calculation onto the residual PAT from the already achieved margins currently in the PAT. So I come up with for the balance, H2 it should be around 6.5%. So could you just give a directionally where — what sort of margin accretion would we be seeing coming from or from which place? Is it coming from TV, or someplace else?
Pramod Gupta
No. This business that — the numbers are on the bottom line. And the guidance that we have given for the numbers is that INR4250 crores is ex of TV and this INR250 crores is also ex of TV. So this INR250 crore out of that like in the first half we have done roughly INR105 crores, you can assume. In the second half, we are talking of doing INR145 crores of profit. After that about INR24 crore or INR25 crore — INR24 crores at the bottom line will be coming from the PLI ex of tax. So roughly you can say we are talking of INR120 crores of net profit on a top line of 2260 roughly. So that way the margins that I am talking about are very similar to the first half margins on a company basis.
Jalaj
Understood. And that makes sense. Thanks for that. And with regards to QIP, I understand you did adhere to some view of incrementally growth coming from consumer goods or consumer vertical. But directionally are we seeing specifically on the IT Hardware also are we looking opportunities via this QIP, or there is something else also in the book keeping?
Pramod Gupta
No, there is nothing in the IT hardware, a very specific to IT hardware that we are planning from the QIP. This QIP is going to be largely utilized for the growth opportunities in PG Electroplast. The IT hardware is actually a part of 50% joint venture company which is called Goodworth Electronics. So, if there will be opportunities on that side, we will be infusing capital to take care of that. But right now, this QIP we are budgeting largely the opportunities that we are looking for growth in PG Electroplast Limited only.
Jalaj
Got it. And one last question if I may. This is more from an industry perspective. How is the competitive landscape specifically in the RAC, or your Washing Machine changing, or there is a lot of competition because all across verticals in the contract manufacturers, we are seeing good traction for all the players. So could you talk a little about the competitive intensity there?
Pramod Gupta
Competitive intensity specifically?
Jalaj
Yeah.
Pramod Gupta
Competitive intensity has always been high and we continue to see the high competitive intensity. In fact, some new players are entering in the washing machine business. In AC business, competitive intensity is high, but because of the problems of the supply chain this year, the situation is getting a little bit more complicated because in the second half especially and next year first half, we think that supply chain management could be playing a very important role in the AC business growth outlook for different players and that side we think is going to determine the growth rates of different companies and how do they tackle the supply chain challenges.
Jalaj
Understood. Thanks a lot and best of luck.
Pramod Gupta
Thank you. Thank you very much.
Operator
Thank you. The next question is from the line of Basant Bansal, an individual investor. Please go ahead.
Basant Bansal
Yeah. Thank you for giving this opportunity. While answering one of the earlier participant question, you said that second and third quarter is generally lower than the first quarter and in the first half we have achieved around INR2,000 crore and full year guidance is INR4,250 crore. That means we will have to generate revenue of around INR2,200 crore to INR2,300 crore. And given the fact that third quarter is low so the majority of the sales, or revenue will come in the fourth quarter. Is my understanding correct?
Pramod Gupta
Yes. It has been the trend in the company’s numbers. Even if you see in the historical numbers, last year for example we did INR1,068 crores in the fourth quarter, full year number was INR2,750 odd crores. Similarly year before that the fourth quarter had INR828 crores of turnover while the full year numbers were INR2,100 crores. So typically fourth quarter is typically a very large quarter for us every year.
Basant Bansal
Yeah. Thank you. That’s all I wanted to ask.
Pramod Gupta
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Jeevan Garg, an individual investor. Please go ahead sir.
Jeevan Garg
Yes. Am I audible?
Pramod Gupta
Yes, you are audible.
Jeevan Garg
Hello, sir. Yes. Thank you. Sir, in AC normally compressor and other equipment were getting imported. Now we are manufacturing it here, or how it is working?
Pramod Gupta
Compressor are typically import only and almost all large companies in India — all companies in India today are actually dependent on import of compressor. I think there are some companies which are going to put up the compressor lines this year. But most of the companies, almost all, almost 90% plus of the capacity is still today dependent on imports only.
Jeevan Garg
So are we any — any other plans to manufacture compressors in future maybe one to two years down the line?
Vishal Gupta
We keep on evaluating the opportunities. As of now we do not have any kind of announcement to make on that, but as and when we have something we come and disclose it.
Jeevan Garg
Okay. Thank you, sir. Thank you.
Operator
Thank you. The next question is from the line of Parth Shah from Tara Capital Partners. Please go ahead.
Parth Shah
Hi. Thank you for the opportunity. I just needed one clarification. The revised guidance for revenue and profitability, is it after considering the PLI, or is it before considering the PLI?
Pramod Gupta
No, after considering the PLI. As I said in one of the earlier questions that we are expecting about INR30 crores of PLI, that is before tax and like typically we have 20%, 21% kind of a tax rates. So post tax impact of that will be about INR23 crores to INR24 crores. So that INR250 crores include that INR23 crores to INR24 crores of PLI impact.
Parth Shah
Okay. Thank you so much. Thank you.
Operator
Thank you. The next question is from line of Bhagyavanath Reddy, an individual investor. Please go ahead.
Bhagyavanath Reddy
Yeah. Hi. Am I audible?
Pramod Gupta
Yes. Please go ahead.
Bhagyavanath Reddy
Yeah. Hi, sir. Sir, at the start of your result document you have published a standalone number. Is this related entirely to our Product business, or how should we look at it?
Pramod Gupta
No. In the standalone company right now the businesses that are housed are actually some part of the plastic components, full washing machine business, and the electronics business — full electronics business, ex of TV and also the mold-making business where we make the tooling and molding for molds for ourselves as well as for others. So that — those businesses are a part of the standalone business. The 100% subsidiary, PG Technoplast has a full AC business. It has a cooler business and some part of the component plastic and sheet metal component business as well as some controller business which we have started providing it’s — I mean some of the electronics business also is in PG Technoplast. So that is the way that today the division is there among the two companies.
Bhagyavanath Reddy
Okay. Thank you for your detailed explanation. And the other was one was on our debt. I think we have about INR240 crores of debt. How are we — how or by when are we planning to repay this?
Pramod Gupta
We don’t actually have a plan to repay debt as of today, and we think given the strong growth phase, that company is some part of debt — if some part of that growth journey is kind of financed by debt. It’s not a problem for us. And we think if it is in control, I mean the debt to EBITDA and debt to equity ratios are within the limit, internal limits that we have set for ourselves then we don’t think there is any issue, or any problem or any hurry to actually repay the debt or become debt free.
Bhagyavanath Reddy
Okay. Sure, sure. Make sense, sir. Thank you.
Pramod Gupta
Thank you.
Operator
Thank you, sir. The next question is from the line of Pratap Maliwal from Mount Intra Finance. Please go ahead.
Pratap Maliwal
Am I audible?
Pramod Gupta
Yes, very much.
Pratap Maliwal
Yeah. Hi. Thank you for taking my question. So I just wanted some more clarity on that point you raised that the import supply chain is getting maybe an area of concern. So which areas are affected for us in terms of [Technical Issues]. And does this pose any risk to the guidance that we’ve given going forward in terms of the supply chain management is going to become a key monitorable going ahead?
Pramod Gupta
As of now, first of all, I want to highlight that for us till March there is no challenge. We have actually secured all our supplies for almost all critical components and we are very sure of achieving these targets. In fact one of the reasons why because of which some inventory increase has happened this year is because we have been extra careful and we have been planning for the supply chain issues and therefore we are confident that we will be fine with the guidance which we have given. That’s point number one. Point number two is this that Government of India of late has been actually putting quality control orders basically making the BIS certification mandatory for component factories also which supply the components to India. And some of the key component factories have been actually getting their BIS certification getting over and they are not getting renewed easily. And that is leading to some supply chain challenges this year and is likely to actually aggravate further next year and that is why I am saying that supply chain issues are becoming challenging in the sector.
Pratap Maliwal
Okay. Understood, sir. So thank you for the detailed clarification. And just one more question. Now you also said that the ASPs are coming down for products. So I’m just trying to understand our revenue model. How does it affect our top line and margins when the average selling prices for commodities — sorry for the products comes down as commodities are a pass-through? So how does the revenue model work here?
Pramod Gupta
So, typically the bill of material is a pass-through. We get conversion cost, or basically the contract, basically the making charges for the product. So commodity prices are reset every two months or a month or three-month basis. And we therefore do not take the risk of commodity prices. So if the commodities prices go up, the margins optically look low in a percentage terms and vice versa when they happened other way, like in a sense then when the commodity prices go down, we see our margins optically looking better in percentage terms.
Pratap Maliwal
But that resets in a quarter’s time when the prices are reset again and margins come back to kind of a steady state level. Is that it?
Pramod Gupta
Yeah. I mean see, it’s a kind of moving thing. Every quarter we see some — I mean and there are different kind of contracts. Some clients actually have a contracts for the full season, some contract — some clients have a contract for two-months price revision or three-month price revision. So based on that the overall pricing actually gets set. And we also, according to the contracts that we have, try to hedge our commodity risk.
Pratap Maliwal
Okay, sir. Thank you for the clarification and best of luck for the time coming ahead. Thank you.
Pramod Gupta
Thank you.
Operator
Thank you. The next question is from the line of Mythili Balakrishnan from Alchemy Capital Management Private Limited. Please go ahead.
Mythili Balakrishnan
Thank you for the opportunity. Congratulations on a great set of numbers. I just had a question on the AC. You mentioned that the growth in the AC segment was 212%, right?
Pramod Gupta
Right.
Mythili Balakrishnan
It’s right. And this is in terms of revenues which you’re talking about?
Pramod Gupta
Yes, for the quarter.
Mythili Balakrishnan
Volumes would have been even higher because ASP you mentioned has come down.
Pramod Gupta
Yes, volumes were even higher than that.
Mythili Balakrishnan
This is like significantly higher than what the industry has been doing. So just wanted to get a sense from you as how are we gaining share, are we gaining share from other players? Are we gaining share from their in sourcing? What exactly are the drivers for this kind of significantly ahead of industry growth?
Pramod Gupta
So I mean this 212% is obviously an aberration especially because see this quarter, the last year base was extremely low. I clarified in the subsequent question that last — the better way is to probably look at first half, or on a trailing 12-month basis. But nonetheless, the growth there also has been pretty high. In the first half, our growth is probably close to 143% in the AC business and we have been obviously — been gaining a little bit of market share from some of the companies’ existing clients. Also we have seen our share of business increase. And we have been able to add a lot of new clients in the last one and a half two years which have ramped up well with us. So all those things have actually helped us to gain market share and show this kind of volume growth in the AC business.
Mythili Balakrishnan
Got it. And when you look into the next year in terms of the visibility that you’re seeing, obviously it will depend a little bit on what happens in monsoon et cetera. But is there a sense that some of the larger companies are looking to in-source because we hear at least the market leader has some large factories which will come online, etcetera? So just wanted to get a sense on that.
Pramod Gupta
We also keep on hearing what you are saying, but as of today the outlook on the business remains extremely robust. In fact, we are seeing, I mean to put things in perspective, we have increased the capacity even this year by almost 50% on a base of last year. And we think in the season, given the kind of order book that we have, we will be probably out of capacity even on the increased capacity this year.
Mythili Balakrishnan
Got it. And any plans for looking at export, or is that not exactly on our agenda right now?
Pramod Gupta
No, no. It is very much on the agenda. We have started planning for that. So we have a separate team of both sales marketing as well as the product development and R&D which we have set up in the company. And in next one, two year export is something which we will be looking at. So we have started developing products for the Middle East and African market on the AC side and we are working towards it. So we hope that in next one, two years we should see some start or some beginning in the export side as well.
Mythili Balakrishnan
Got it. That’s all from my side. Thanks a lot for this.
Pramod Gupta
Thank you.
Operator
Thank you. Ladies and gentlemen, we take that as the last question for the day. I would now like to hand the conference over to the management for closing comments.
Pramod Gupta
Thank you all of you for participating in the conference and taking your time out. I again want to reiterate, we remain very bullish on the product business at our end. We have shown a very strong first half and even in the second half we see significant growth opportunities. Thank you, everyone. Thank you, everyone.
Operator
[Operator Closing Remarks]