PG Electroplast Ltd (NSE: PGEL) Q4 2025 Earnings Call dated May. 12, 2025
Corporate Participants:
Unidentified Speaker
Vishal Gupta — Executive Director & Managing Director-Finance
Pramod Gupta — Chief Financial Officer
Pramod Gupta — Chief Financial Officer
Analysts:
Unidentified Participant
Charlene — Analyst
CA Garvit Goel — Analyst
Achal Lohade — Analyst
Dhananjay Bagrodia — Analyst
Ashish Kumar — Analyst
Arshia Khosla — Analyst
Kaushik Mohan — Analyst
Pranayur Chatterjee — Analyst
Arpit Shah — Analyst
Vipro Srivastava — Analyst
Kush — Analyst
Akhil Shah — Analyst
Presentation:
operator
Ladies and gentlemen. Good afternoon everyone. And welcome to the PG Electroplast Limited Q4FY25 earnings conference call hosted by GM Financial Institutional securities Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference has been recorded. This presentation has been prepared for informational purposes only. This presentation does not constitute a prospectus, offering, circular or offering memorandum and is not an offer or initiation to buy or sell any securities.
Nor shall part or all of this presentation from the basis of or to be relied on in connection with any contract or investment decision in relation to any securities. 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 management’s opinion are reasonable. The forward looking statements may involve known and unknown risks, uncertainty 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. Those forward looking statements represent only the company’s current intentions, beliefs or 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. I now hand the conference over to Charlene. Thank you. And over to you sir.
Charlene — Analyst
Thank you, Anushka. Good afternoon everyone. And on behalf of JM Financial I welcome you all to the Q4FY25 earnings call of PG Electroplast Limited. We have with us the management represented. By Mr. Vishal Gupta, Managing Director Finance. And Mr. Pramod Gupta, Chief Financial Officer. I will now hand over the call to the management for their opening remarks post which we can open up the floor for question and answers. Thank you. And over to you, Mr. Gupta.
Vishal Gupta — Executive Director & Managing Director-Finance
Thank you, Charlene. Good evening everyone. Thank you for sparing your valuable time and joining this call today. Hope you all are doing well. I am being joined on this call by Mr. Pramod Gupta, our CFO. We have already shared our results presentation and hope you have gone through that. Financial year. 2025 has been another remarkable year in the growth journey of PG with several milestones. The company has done capacity enhancements and scaled up its product business significantly in FY25. Now the company is leveraging its size and partnerships to drive innovation, reduce cost and elevate quality standards.
And as client expectations for faster turnarounds and greater customization continue to grow. Scale has become a defining competitive advantage enabling PGL to optimize sourcing, streamline production and deliver exceptional value. For this financial year our operating revenues for the company has grown by 77%. And crossed. 4,869 crore rupees with the product business contributing around 72.4% of the total operating revenue. EBITDA increased by 81% and stood at 519 crore rupees and net profit rose by 112% to 291 crore rupees the company has posted and industry leading growth in product businesses and operating revenues for the product businesses crossed 3525 crore rupees in FY25 with 111% growth. This is even though when ASPs in certain categories are down by up to 5% on a yoy basis the room AC business contributed 3009 crore rupees which is a 128% growth on on a YOY basis. The washing machine business had growth of 43% on a YoY basis and AA cooler business has also grown by 80%.
Order book and visibility for the product business remains robust and the company is on track to grow the product business significantly again in FY26. Our new product offerings in washing machines and room ACS have received a very good response and the company continues to see increased interest in its product offerings from new and existing clients and we remain very confident in the future growth prospects of our business. Business momentum is underpinned by our disciplined approach to efficient capital allocation with a strong focus on enhancing asset turnover to sustained growth in product business. This strategy has been the foundation of our success fueling industry leading expansion while ensuring best in class return ratios.
As we accelerate forward, we remain committed to achieving market leadership, leveraging our strength to set new benchmarks in operational excellence and financial performance for FY26. Our operating revenue guidance stands at 6355 crore rupees in in PG Electroplast which is a 30% growth over FY25 numbers and at 855 crore rupees in our JV company Goodworth Electronics which is a 57% growth over FY25 numbers. This implies an operating revenue of 7200 crore rupees at a group level which is a growth of around 33% over our FY25 numbers. We are also guiding for a net profit of rupees 405 crore rupees in PG Electroplast which is a growth of 39% over FY25.
Net profit of 291 crore rupees. The growth in product business is expected to be around 35% from 3,526 crore rupees to 4,770 crore rupees in FY26. The capex guidance for FY26 is in the range of 800 to 900 crore rupees. The company has planned to further expand the RAC capacity with a new green field plant in Biwadi. Also a new green field facility is being planned in Greater Noida for washing machines. The company is on the verge of finalizing a land parcel for its refrigerator plant in South India. The super facilities will be expanded further with a new building and further capacity enhancement for the RAC business.
Also, our board of directors today have approved the final dividend of rupees 0.25. That is 25 pesos per share. With this now I will hand over the call to my colleague Mr. Pramod Gupta, our CFO to elaborate on the financials.
Pramod Gupta — Chief Financial Officer
Hi, good evening everyone and I welcome you all to this conference call. I’m sure all of you have seen the financials in detail already. We had a very good scale up during FY25. From operational point of view, all our business have reported very significant growth over the last financial year. The company’s operating revenues for fourth quarter 25 were up 77% to 1910 crores. EBITDA grew 93% to 232 crores and net profit rose 105% to 146.4 crores. During the Q4 and financial year 25. Operating margins have seen slight improvement due to cost control, lower commodity prices and operating leverage.
On the balance sheet side, if you look we are now net cash company with almost 980 crores of cash during the year. Company has done significant capex of almost 488 crores in commissioning new greenfield plant in Biwadi. Capex in SUPA for RAC manufacturing and also company has issued capital advances for land and building in Greater Noida for new washing machine facilities. As stated by Vishali, we have guided for 800 to 900 crores of further capex in FY26. This will be funded largely by the operating by the cash that we have on the balance sheet today.
Also we hope that going forward the growth momentum will be good. And again I am reiterating here that the capital efficiency by sweating existing and new assets will be the key focus area for the company in the coming years. Our asset turn net fixed asset turn has crossed 5 this year and we hope to sustain that in coming years as we as our capex get commissioned and we are able to fully sweat them. We remain very optimistic on the growth opportunities in our focus area and we believe company is well placed to expand its market presence for the incoming years.
With this I’d like to open the floor for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of CA Garvit Goel from Invest Analytics Advisory llp. Please proceed.
CA Garvit Goel
Hi, am I audible? Yes, you are audible. Good evening sir. Congrats for a good set of numbers. My first question is on the industry demand. Basically our customers like Blue Star and Voltas are a bit cautious regarding the near term demand particularly due to early motion or we can say delayed summer and they are facing some rising inventory levels at the channel. So but we are on the other side pretty much confident which is reflected in our numbers as well. Forever 26. So sir, please help us to understand uh what is giving us this level of confidence.
Uh is it because uh we are further looking for increasing our market share or what is this growth driver for us? Forever25
Vishal Gupta
basically you know as we told that we are serving 35 plus brands so it is the market situation is always very dynamic. Sometimes some brands are doing well, sometimes some brands on may not have their own, you know their issues. So for us this business is looking very strong it as of now also in spite of the fact that overall industries facing certain inventory issues because of the rains and the arrival of the raise. But for us as a company we are not seeing major challenge as far as June quarter is concerned and going forward also we have the guidance but we have given.
We are very confident that we’ll be able to meet those guidance. The only reason is because we are serving 35 plus banks so we are able to diversify the risk and diversify those issues with us that normally some customers face.
CA Garvit Goel
Understood sir. And so secondly on our segment side you mentioned product business is going to do well and electronics also. But looking at your plastic division so you are estimating a growth of around 10% for next year. So why this slower growth we are targeting for next year? In this particular segment,
Vishal Gupta
Basically the issue. Is petroleum prices are on a lower trend right now. And you know all plastic businesses the prices are driven by a petroleum crude prices. So we are seeing that the drop in the raw material prices and this business being a straight path to business to our clients. So what we see that ASPs will drop. Overall volume growth will be good but at a value level growth we are targeting around 5 to 10% only.
CA Garvit Goel
Got it. And lastly on the K tech side, any new product that we are going to launch via this K tech that we are going to do next year.
Vishal Gupta
The only product what we are talking about right now is refrigerator that is already guided. That is what I have told in the call also right now. So we are planning to put up a refrigerator plant in South India.
CA Garvit Goel
Thank you very much sir. Always for the future.
Vishal Gupta
Thank you.
operator
Thank you. The next question is from the line of Achal Loharde from Nuvama Institutional Equities. Please proceed.
Achal Lohade
Yeah. Good afternoon sir. Thank you for the opportunity. Congratulations for fabulous set of numbers. Just two questions. First you know with respect to the 35% revenue growth guidance for product. Is it fair to say that you know in washing machine given the work full tie up now this can grow in triple digit in the current year. Given the capacity, addition etc.
Vishal Gupta
We will stick to the guidance what we have given to you. We will not go into those details. So this at a product business level we are guided for 35% growth and we stick to those numbers. Right. As of now sir. And we don’t support customer specific numbers.
Achal Lohade
Sure. The second question I had, you know with respect to the PLI and the state incentive, if you could help us, what has been the quantum which is booked in the fourth quarter?
Vishal Gupta
Can you just repeat
Achal Lohade
for the fourth. Quarter, sir, what is the state and central government incentive? We have booked
Vishal Gupta
31 crore rupees. 31.5 crore. 30 crores is a PLI and 1.5 crore is the state government incentive which is.
Achal Lohade
Okay, so 30 crore for. For FY25 and which is accounted for in fourth quarter. Have I understood right sir,
Achal Lohade
it is. A FY24 number which we received in 25.
Vishal Gupta
So in our case in PLI we book this on the basis of the cash only on that. On the basis once we get the sanction and the money is just about to receive, we book in our books of course.
Achal Lohade
Understood, Understood. And one last question. With respect to the compressors. Any. Any update on the status for the Compressor manufacturing.
Vishal Gupta
The building is already being made and the contract is being completed. The verge of finalization right now.
Achal Lohade
Okay, understood. All right sir. Great. I’ll fall back in the queue for follow ups. Thank you so much.
Vishal Gupta
Thank you. Thank you so much.
operator
Thank you. The next question is from the line of Dhananjay Bagrodiya from Ask. Please proceed.
Dhananjay Bagrodia
Oh, thanks. So most of the questions are answered. Just wanted to ask you now when we’re looking ahead, are we seeing that now competitive barriers for other EMS players because of now PLI now becoming more and more advanced. So the players who have gone through now we are in a very strong position to continue with that growth.
Vishal Gupta
The PLI was just an enabler to gain scale. And now I think PLI is over in the sense that in the next two, three years PLI will be over. Now obviously the companies which have been able to take advantage of the PLI and grow and make scale up their business will surely have a leadership position in the segment. And as you know, the scale itself becomes a good competitive edge if it can be rightly harnessed by, you know, debrising your strength in customer relationships, sourcing relationship and doing the right product development. So we think that now for any new player to come and enter and scale up to the scale is going to be relatively difficult.
Much more difficult. And given the fact that the players are now already established, at least for the foreseeable future, we don’t see any big threat from any new player to emerge in this segment.
Dhananjay Bagrodia
Now in EVs we’ve already got a foot into the door. Are we seeing more growth in that coming or how are we seeing that?
Vishal Gupta
The EV partner, our EV partner has still to get some clearances from government of India and ARIA for launching their products. So once they get that go ahead then only we will be putting up the plant for them to start doing the assembly and manufacturing. We are still awaiting that those clearances for that our partner.
Dhananjay Bagrodia
And so CapEx you’re looking for the. Next year
Vishal Gupta
the total CAPEX is going to be in the range of 800 to 900 crores. We are actually going to put UP refrigerator plant. 300 crore is earmarked for that. We’re going to be spending significant amount in compressor and we are going to start a new greenfield facility for washing machines in Greater Noida. And we are also looking for a greenfield plant near Bhiwadi in Rajasthan for components, coolers and maybe at some stage during the tool room there. So these are the plans there. In the next next year we are going to have a very heavy capex and we, we think that in next two years we’ll be actually doubling our dot lock from currently about you know 1200 odd crores to something like 2200crores odd.
Dhananjay Bagrodia
And the majority of that is coming in FY26. And because if you’re saying 900.
Vishal Gupta
Yeah. Large part of it is going to be coming in.
Dhananjay Bagrodia
Okay. Fantastic. Actually this is very very good. Congratulations again on a very strong set of numbers. Kudos to you.
Vishal Gupta
Thank you. Thank you.
operator
Thank you. The next question is from the line of Ashish Kumar from Ampersand Capital Investment Advisors. Please proceed.
Ashish Kumar
Thanks for the opportunity. My first question is on PLI again. What kind of PLI incentive can we expect next year for FY26? And my second question is on the Goodworth business. How do we see it in FY26 and beyond? Do we expect breakeven and what kind. Of profit margin can we expect from this? Thanks.
Vishal Gupta
Yeah. Next year we expect to have a PLI of 37.5 crores which is what is going to be our share for meeting the targets in 2025 financial year. Coming to the good work this year we did 544 crore turnover and we had a small loss there at EBITDA level though we had a profit about 1% margin. Next year we hope to improve that. We are budgeting in about one and a half to 2% kind of EBITDA margin in that business. And you can assume that next year we should see some profitability going forward. About 2% kind of a margin at EBITDA is what is sustainable in that business.
Ashish Kumar
Thank you.
operator
Thank you. The next question is from the line of Arshia Khosla from Niribal Bonds Institutional Equities. Please proceed.
Arshia Khosla
Yeah, thanks for taking my question and. Congratulations on a strong performance sir. Most of my questions have been answered. I actually just want to understand the 800900 capex guidance. It is inclusive. Is it including the backward indication that we’re looking for rec or it will be. I mean it’s just the requisite and washing machine part?
Vishal Gupta
No, no, it includes everything RAC washing machine, refrigerator and the new plant for basically cooler as well as tool room which we are looking at everything.
Arshia Khosla
Okay.
Vishal Gupta
And compressors also. And compressors also.
Arshia Khosla
Okay. Okay. And sir, how the demand. I mean because of obviously because of the delayed summer. The demand. April has been a complete washout. So how is the demand. How are we looking forward to like May and June for this quarter?
Vishal Gupta
April has been a good Month for us, we were on track of our budgeted numbers. May also we have not seen any significant cancellation as of yet. June a month we will see. We will watch out how things pan out. But from whatever kind of inputs we have, we think at our end we have yet to see some very significant impact. But nonetheless we have been hearing the stories of, you know, south being very slow and also because of some intermittent rains in the last two weeks there has been slower sail.
But you know, on the other hand I will just say that the summer in North India last till July. So we are still in Navid and I think there is still some room to go. More importantly, we think that because of several other changes which are happening including you know, this tax reduction etc. Which happened in the budget and also AC being a secular product, this seasonality will probably impact this for next month. But it is surely not going to kind of derailed the long term story. And we do not actually put up the capacity for business only for one year in our opinion.
We still remain very optimistic and very bullish on the long term growth prospects of AC business.
Arshia Khosla
Great. Thanks for that, sir. Understood. And quickly on the margin side, would you like to guide something on the EBITDA margin side as well?
Vishal Gupta
I think you can assume them to be remaining flattish this year. We think the sustainable margins that we have are sustainable.
Arshia Khosla
Okay. Okay. Thank you sir. And congratulations.
operator
Thank you. The next question is from the line of Kaushik Mohan from Ashika Group. Please proceed.
Kaushik Mohan
Hi sir. Congratulations on this great set of numbers. Sir, I just wanted to understand. You mentioned now that you are going to get started. 37.5 crore on the PLI for FY26 and in the last year you got 31.5 crores on the PLI. That means on 405 crore we are expecting 42% growth on the full year, right?
Vishal Gupta
31.5 crore rupees. What we got in the last quarter out of that 30 crores was a PLI which was accrued to us in the FY24. But since we received the sanction and the money in FY25 that’s why it has been booked in that way in FY25. The sales, what we have done, the PLA, what has accrued to us is 37.5 crore rupees which will be accounted for in FY26. We expect to receive that money in FY26. I hope this clears this. There is also one more thing. Out of the 31.5, 1.5 crores was a state government incentive in the fourth quarter for the full year that state government incentive was 6 crore. It is going to continue at 6 crore even next year.
Kaushik Mohan
That’s very clear sir. Answer. We can see that we are going for a green field. So how much in this 800, 900 crores are allocated for the land acquisition and how much is for the missionary equations? Any calculated numbers do you have?
Vishal Gupta
Yeah, I, I think almost close to 600 crore rupees over the next two years are going to actually go for building across all the four locations in India like super.
I mean in the west, in south, in basically north India and in the west in basically. Yeah. So out of 800 to 900 crores the building, land and building capacity is around 350400 crore rupees and.
Kaushik Mohan
So. I can’t hear you.
Vishal Gupta
See I’ll tell you exactly as I was telling you. Over the next two years we think that we will be having we’ll be almost doubling our gross block. Today our gross block stands at something like 1200 crore. Now next two years we think that is the kind of capex we will be doing. And we are starting four greenfield facilities as I told you and the total amount of money which we will be spending in land and building across these four places is going to be in the region of about 600 crores.
Large part of this money is going to be accounted for in the first those land you have to purchase initially and building also you have to do construction initially and then plant and machinery follows. I am not going to actually be able to give you exact number of how much land and building out of this 900 crore which I 800 to 900 crore which I expect to be spent this year is going to be land and building but I think it will be significant portion. But over the next two years almost 600 plus crores is going to be in land and building.
Kaushik Mohan
Got it. The push two years down the line. The current year capex and the next. Year capex will be started giving us revenue. That means that if we maintain asset terms to be 5 then we’re talking about it 10,000 crore on the sales is my understanding right?
Vishal Gupta
No, your understanding is right. But this five is what we have achieved this internally we target four to four and a half. That is a good number and we think that once we actually scale up the whole all the facilities that is what we should be able to achieve. We are targeting of a growth of around 30 to 35% for next three years. And this Capex has been planned on that.
Kaushik Mohan
Got it, Got it. Great. Thanks sir. I’ll get back in the queue.
operator
Thank you. The next question is from the line of Navneet Singh and individual investor. Please proceed.
Unidentified Participant
Hello sir, am I audible?
Vishal Gupta
Yes.
Unidentified Participant
So can you please give us some colors on some forecast on the expansion, margin expansion or the products we have higher margin.
Vishal Gupta
See we are in the business of contract manufacturing. Please appreciate margins are not likely to see major increase. Whatever gains we will get are likely to come only because the productivity and efficiency gains. And I think from an investor point of view I will suggest strongly that you should focus more on the scaling up of business in terms of volume and value and not on margins. Specifically margins if happen is bonus but I will refrain from guiding for margin expansion in the long term, long to medium term.
Unidentified Participant
All right. On research and development side. So on the R and D side do we have any, any more on that front any unique product that we are planning to launch?
Vishal Gupta
We have been actually augmenting our R D team very very significantly over the last three, four years. In fact the products which we have launched all in the last three years have been becoming industry benchmark. In fact some of the brands have copied our products. In fact the innovations which we have done, some of the innovations which we have done in our probes have been very well appreciated by some of our clients. And we continue to invest very aggressively in the product side and product development and R and D side. We have been actually increasing our and strengthening our team on R and D in both AC and washing machine very very significantly over the last two years.
Unidentified Participant
So what is the expenditure over R and D in terms of sales?
Vishal Gupta
Right now the number will be pretty small because see our sales comes largely from doing the contract manufacturing. So right now that number on an overall basis including maybe whatever expenditure we are doing on other than manpower maybe just about half a percent, 2.75% of our turnover but it is likely to see increase in terms of absolute amount. See you also have to appreciate that we have grown very very rapidly over the last four years from 700 crore turnover going to 4,000 under 4,800 crore to more 4,700 crore or it’s not small number and out of that today what we are spending is a decent amount of budget for the kind of business which we do now.
Opinion obviously it will scale up going forward.
Unidentified Participant
Understood. That is all from my end and congrats for the great numbers and hope we see even greater heights.
Vishal Gupta
Thank you.
operator
Thank you. The next question is from the Line of Pranayur Chatterjee from Berman Capital Management. Please proceed.
Pranayur Chatterjee
Hi. Hello sir. Good evening. Am I audible?
Vishal Gupta
Yes, you are audible.
Pranayur Chatterjee
Great sir. Firstly, on the RSE business, obviously more. Plenty of questions have already been asked so I’ll try to get some in some other way. So Obviously both the Q4 numbers that PT has shown, obviously it was a surprise anyway. Positive surprise. But what was more surprising is the commentary on the growth in upcoming year. So what I wanted to understand it’s actually it might help us track your business better in case you can disclose it in terms of secondary sales, right? Obviously you are giving primary offset to your clients in terms of secondary sales.
Can you like throw some more color on your RFA business as to how it is played geographically? Right. So south, west, east, north. If you can give some color on that. And on the same lines are these big guys who we investors keep listening to like Voltas, Bluestar. Voltas I know is not as big for you as it was before. But Volta, Bluestar, Haggles, Johnson, Hitachi and all these guys are these really good proxies to track your AP business.
Vishal Gupta
Well, first of all I tell you I do not have any numbers on North, south, west and east even for my own products. The reason is that when I supply from my factory in west or a factory in North, I don’t know which model is going to which destination because it depends upon the brand which where are they sending. That is point number one. Point number two is, you know, my business actually doesn’t depend only on the growth of particular brand or particular. We are servicing more than 35 brands. And also you have to understand more, there are multiple drivers in our our business.
It’s not only the industry growth, it is also the how much outsourcing is happening versus how much insourcing is happening. That also is a very important driver for us in terms of the growth and the business to us. So in the last three years or previous to FY25 actually the industry was doing lot more outsourcing, a lot more insourcing. This year I think the outsourcing trend has reversed. And we think and we still believe that economic sense is actually or economic rational is to do more outsourcing. Till the time this business in India remains highly seasonal.
It doesn’t make sense for brands to put up large capacities in such a high seasonal business. It makes much more sense to outsourcing especially given the fact that none of the Indian brands and some of the large Indian brands are still local players. They are not still global. Players who are exporting and having huge round the year demand. That is point number one. Point number two is also that every two to three years there is a DE rating change which also puts a lot of development and product, I will say investment owners on the brands because every three years they have to come up with new models and new categories to take care of the VE rating.
So taking all this into account, I think still the outsourcing makes much more sense. Yes, but because of the PLI and the other reasons some of the brands actually decided to put up their own facilities and they were out doing a lot more insourcing. In our case we are working with also E Commerce, Modern retail and other players and some of the other brands which are focusing only on these channels which are gaining huge market share and they have started to become sizable. They are also one of the key reasons for our growth being slightly better than the industry.
And we think that momentum or that advantage that we provide them because of our cost effectiveness, our scale, our sourcing, our product development R and D is actually sizable and actually helps our client partners to gain market share in the marketplace. And that is one of the key reasons that we are remaining still very confident of the growth even in the next year. Thank you.
Pranayur Chatterjee
That makes a whole lot of sense. Sir, that is well accepted. With regards to your product business revenue growth which is around 35% for FY26, the ref generator segment for which you have earmarked about 300 crores capex, I’m assuming that will be taken, that will be reported as a part of the product business as and when it starts generating revenue.
Vishal Gupta
But in 26 there is no revenue in 26 I have not budgeted any revenues from that.
Pranayur Chatterjee
Got it. So can you throw. That is clear. Can we throw some color on the business as to when you expect ideally production to start and on the 300 crore capex, what would be the peak revenue and EBITDA margins?
Vishal Gupta
These numbers I will take probably in the next call, next conference call because we have still just hired the team and we are just working on them. There are some internal numbers but I don’t want to share them. We are in the final stage of finalizing the plant machinery and land and that budgeting is going on. But in the next conference call I promise I’ll actually be able to show much more light on it. But we are very, very hopeful that we should be able to meet our internal ROC target on that business in the second year of operation.
From the second year of operations.
Pranayur Chatterjee
Excellent. Sir. Sir. One follow up crosscheck. You gave a detailed answer on the capex to a previous participation. I just wanted to confirm that. So doubling of gross block. Almost doubling of gross block over the next two years. 800 to 900 crores in FY26 and the remaining which is a smaller amount next year in the first year. And the reason I’m asking this sir is to gauge how much the depreciation cost would go up because the implied life of land and building is very different from plant and machinery. So in the first year out of 800 to 900 crores I heard you say 350 crores would be land and building.
Is that the correct number? Because yeah,
Vishal Gupta
it could be actually slightly more also Basically we are still scouting for land in certain places that have not been finalized yet. So that number should be actually maybe 400 also. But I don’t know that number. Once the land parcels are finalized then I will be able to actually give you a definitive number. But I would like to highlight here that the land typically if it is taken on leave from any of the development authorities typically has a life of you know, if you are taking for the first time of like leases for 100 years or so.
So whatever you write off also in case of land or depreciate itself sols also is very small amount. Okay. That is point number one. Point number two is and, and even in the building and plant and machinery till the time you capitalize them, you don’t actually start depreciating any of those things.
Pranayur Chatterjee
Okay. Okay. Got it. Got it. Thanks a lot for answering my question. Excellent quarter and I wish you all the best.
Vishal Gupta
Thank you. Thank you.
operator
Thank you. The next question is from the line of Chalaj from Swan Investments. Please proceed.
Unidentified Participant
Hi, am I audible?
Vishal Gupta
Yes.
Unidentified Participant
Thanks for the opportunity. Sir, I wanted to understand what is the. Where do we stand on the compressor business right now or the compressor plant we are trying to put in? And one more point on to is I believe that majority of it look for internal consumption. So should we assume as and when it comes online should lead to better margins. How should we understand that.
Vishal Gupta
As I told earlier in the call, the construction of the building has already started. The contract is under finalization. The plant and machinery is also being. Finalized and as earlier mentioned that majority of the capacity which is being put will be used for in house consumption and some part of that will be sold to external parties. And since it is for in house consumption it will be margin accretive.
Unidentified Participant
Understood. So. So tentatively whenever building in that they should get for a commercial operationalization should start from this plant.
Vishal Gupta
Q4 of FY26.
Unidentified Participant
Q4 of F26 so nothing is building the assumption for current India.
Vishal Gupta
Nothing. Nothing in this guidance.
Unidentified Participant
Got it. Okay. And then sir, what sort of margin expansion can we expect from this if it comes in house?
Vishal Gupta
I don’t think this. Maybe by the time we are able to sign off the agreement and everything is in place I think we’ll be in a better position decision to hear something on that. Not right now.
Unidentified Participant
And so I see that the, the cash flows for the at easy closing for the full year are standing at a CFO stands at negative. So could you help us understand what exactly is is it that we are preparing well for the coming quarters that the inventory buildup has been done or what is exactly the reason behind it?
Vishal Gupta
So if you look at our cash flow this year, basically we are carrying a very large amount of inventory and you know we have a. We had a close to about 1300 crore of inventory closing inventory at the end of the quarter. Obviously some of it is going to get a significant part of it is going to get shed in the April, May, June quarter because we have. We are not seeing a very any big challenge as of yet in the AC business. But one of the reasons also which we were carrying some of this inventory was because there was an uncertainty on account of compressor BIS related uncertainty because BIS was getting over for some of the Chinese players and we are.
We consciously kept higher inventory of compressor and we are carrying that yet. So that is okay with us. And we think that during the year we will be able to utilize it for in the normal course of the business.
operator
Thank you. The next question is from the line of Arpit Shah from Stallion Asset. Please go ahead.
Arpit Shah
Hi. Hello. Am I audible?
Vishal Gupta
Yes, yes, you’re audible.
Arpit Shah
Yeah, yeah. Just wanted to understand whether the PNI incentive of 37.5 crores which I’m accounting for, is it part of the guidance? So that would be on top of this.
Vishal Gupta
No, no, it is a part of the guidance.
Arpit Shah
It is part of the 405.
Vishal Gupta
Yes.
Arpit Shah
Okay, okay, okay, sure. And all the three new CapExes which you all are planning is there none of them revenues or anything is part of the current guidance. Everything shall come in F5 initiative.
Vishal Gupta
No, no, no, none of those. Apex only the capex on the brownfield expansion of the capacity for AC which will be very small amount will be a part of will be contributing to the revenues in FY26 large part of the Greenfield capex. Is going to be actually starting to contribute only from financial year 27.
Arpit Shah
Got it. Any highlighted amounts which you have allocated I think here across was for the refrigeration. What was the amount for the RAC and the washing machine?
Vishal Gupta
Washing machine is going to be about. No longer being recorded. Sorry. Was hing machine is going to be about 90 crores and AC is going to be another 200 to 250 crores this year which will also include some part of compressor.
Arpit Shah
Okay. Within 20 to 250 crores come include the compressor as well.
Vishal Gupta
Yes, a large part of it. Some part of it has already been done this year because we have constructed a building. So building augmentation will continue in the coming year. Some part of the building will come and then there’s a compressor planted machinery and some some augmentation to the extreme plant and machinery for capacities in AC we will be doing at Biradi as well as in Super.
Arpit Shah
Got it. If you can just walk down the compressor in terms of margins like how much can it add to our margin since since you’ll be using a lot of lot of it captive and maybe we’ll be selling it outside. So what the margin work would look like if we are adding.
Vishal Gupta
Yeah. Once we are able to finalize we will be analyzing the and signing the contract manufacturing agreement with the partner that time we will actually detail the numbers on the margins and the impact they will have on the margins of the company.
Arpit Shah
And currently what percentage is imported for the for India? What percentage of compressors are imported in India and what percentage are manufactured domestically?
Vishal Gupta
Only about 10 to 15% is getting domestically manufactured. 90%, almost 85 to 90% was getting imported. But in the next two years I think all the plants, all the companies are planning with the existing companies as well as some new players are planning capacity expansion and compressors
Arpit Shah
and that is. With PLI incentives which you all would. Be getting
Vishal Gupta
in compressor. We have not availed PLI incentives.
Arpit Shah
Got it. Got. Fair enough. Thank you so much.
Vishal Gupta
Thank you.
operator
Thank you. The next question is from the line of Vipro Srivastav from Philip Capital. Please proceed.
Vipro Srivastava
Hi, so I’m audible.
Vishal Gupta
Yes, yes you are.
Vipro Srivastava
So quickly on the other current assets, why has it gone up resulted in CFO becoming negative? No, no, I didn’t get it. Can you just please reply and be little clear. So what I was asking was the other current assets of the company has. Gone up for FY25 and that has resulted in the cash flow from operations becoming negative. So what’s the reason for that? Let’s just know that.
Vishal Gupta
Yeah. In other current assets there are two segments, two things which are actually leading to expansion in other current assets. See, we are having good amount of GST credit which goes into other current assets because of the decent inventory which we are carrying. So that is one part which we will be utilizing in the coming months. Some part of it we have already utilized in April. That is one. And second thing is we have also paid some of the advances, capital advances to some some of the vendors for content, machinery etc.
So those things are there right now which are part of the other current assets which we will be actually able to utilize once the commissioning of the plants etc happened.
Vipro Srivastava
So. Okay, so by the end of FY26. It will be back normal level. You understanding correct?
Vishal Gupta
Yes.
Vipro Srivastava
Here. Okay sir. And just one more question. So on the guidance which you have given for FY26, I’m sorry if I missed this but how much of the revenue is coming from PLI?
Vishal Gupta
FY26, the revenues that will come from PLI is 37.5 crores. Oh.
Vipro Srivastava
Okay sir. Okay sir. And so lastly on the ref side since you are doing a significantly large caterheads, what are the asset class we can expect?
Vishal Gupta
We think this number we will be able to detail to you in the next call once we will have a full numbers in place. Right now we are still in the works because a lot of calculations and things are going on in the company. Some basic estimates are there but numbers will get finalized by end of this quarter. And then I will be able to share with you the exact estimates for the asset terms and the return ratios.
And margins that business.
Vipro Srivastava
Sure, sure. Thanks a lot.
Vishal Gupta
Thank you. Thank you.
operator
Thank you. The next question is from the line of Kush from Ananta Capital. Please proceed.
Kush
Good afternoon sir. Congratulations on always beating your guidance. Sir, one question on refrigeration refrigerator business. I think this is a new product for us. Is it a more technical product? Sir, do we anticipate any technical, you know, know how issues or is it. Very different from ACs in terms of the product being able to be manufactured efficiently in India?
Vishal Gupta
So the team is already in place. The product team, the R D team and the operations team and the project team. They are already hired. They are already working on the project. So we don’t see any issue in the successful implementation of this project. Launching of the products, getting approval from the our customers. So the template but we have for our other product businesses where we aspire to have a cost leadership and going forward targeting product leadership. Also so this is a template we have adopted for refuter business also. So we don’t see any major challenges that and we are very confident on going on this project.
Kush
And I’m sure sir there must be already some talk with some anchor customers who would probably anchor the facility as of now. I don’t. We don’t want the names but you know sir, any commitments from any customers that for offtake as of now.
Vishal Gupta
Will not be. It won’t be right for us to say this thing right now but the project is being put only on the basis of once we have a visibility on the business.
Kush
Okay. Understood sir. And sir, about just one technical question sir is is PLI incentive part of other income or is it part of revenue of our operations?
Vishal Gupta
It is part of revenue from operations.
Kush
Okay. And one more bookkeeping question. You know if you are saying 405. Crore of PAT next year. So if I just do a rough. Calculation, are you Talking of around 750 crore of EBITDA and 150 crore of depreciation plus interest plus other income and PBT of 600 crore? Is that a ballpark number? Rough math, right?
Vishal Gupta
No. 405 crore, the PBT is not going to be 600 crores. The PBD is going to be more like 520 or 510 crores. So we have a 20% tax rate roughly. And I mean from there you can work backward. Most of the capex which we are doing this year is not going to hit us immediately. It is going to actually come and hit us only probably in the 27th,
Kush
FY27. So depreciation will go up in FY27. Is what you are saying? Largely.
Vishal Gupta
Yeah. Yes.
Kush
And sir, I see significant cash on the books. So sir, what will be our overall average debt for the year or year ending debt? You know, given that there is scale up in the business. But still we have a lot of cash. So sir, will we require a lot. Of debt in this financial year?
Vishal Gupta
No, we don’t intend to take a lot of debt. In fact a lot of the capex is initially going to be funded through. The. Cash lying on the balance sheet and whatever. Even if we require some debt, maybe even that will be only for working capital and that will be probably very temporary because we have a seasonality, high seasonality. So typically that debt, even if it goes up it also comes down very significantly after June. So I don’t think. But that will be the case because they will be having very healthy internal accruals also next year. And even now this year we had close to 500 crore of EBITDA. So next year we think we should be able to. Even if you assume the margins remain stable which is what is our guidance also then we will be having over, you know, 650, close to 650 crores of EBITDA.
So that should take care of our working capital requirement which we may have. So I don’t foresee a huge increase in the debt even next year after the capex of 800 to 900.
Kush
Understood sir. Understood sir. Thank you. And all the best sir. I’m sure as always you have always beaten the guidance. So I was assuming a 450 crore PAT when I. When I said 600 crore of PBT. So sir, all the best for the next year and beyond, sir. Thank you.
Vishal Gupta
Thank you.
operator
Thank you. The next question is from the line of Akhil Shah from yes, securities. Please proceed.
Akhil Shah
Hello sir. Am I audible?
Vishal Gupta
Yes, you’re audible.
Akhil Shah
My question is regarding other income. It has gone substantially up from 13 crores in FY24 to 35 crores in FY25. So any reason behind it?
Vishal Gupta
I’ll. I’ll give you the reason exactly. The interest has gone up significantly. One is obviously on account of the business. Business has seen a very sharp growth especially the AC business room. AC business even in the fourth quarter actually had 100% growth, over 100% growth. So that is one of the reasons because it’s very capital working capital intensive. Also if you will see closely, you will see that we have seen some improvement in number of working days especially on the receivable side. And one of the reasons because of that is that we have been able to get the use the vendor programs of some of our clients where we can actually discount our receivables and get our money early by you know giving some factory kind of reverse factoring kind of arrangement where the interest we have to bear.
So because of that also the interest cost has gone up during this quarter. The reason why we have utilized those is that we have done some of the FDs which are at very attractive rate and it made sense, more sense to actually do the and utilize these vendor program factoring, reverse factoring vendor programs of the clients and which were at a competitive rate in comparison to the FDS which we have right now.
Akhil Shah
Got it sir. Thank you.
operator
Thank you. The next question is from the line of Vijay Bhatt, an individual Investor. Please proceed. Mr. Vijay, I request you to unmute yourself and then speak. Sir, it seems like the Participants line has got disconnected. Shall I move to the next?
Vishal Gupta
Yeah please.
operator
Okay. The next question is from the line of cost of Ray, an individual Investor.
Unidentified Participant
Hello.
Vishal Gupta
Yes, Mr. Kausu. Yes.
Unidentified Participant
I said congratulations on a great set of numbers. I would like to understand that you. Are projecting 35% growth in the product business. Now we know there is some compressor issues. So how do you tackle the compressor issue? Do you think the BIS issue will be settled or how will you really address the compressor if you to achieve this growth and the related question in the projections. Oh sorry. Maybe you carry on. I’m lasting it. Yeah.
Vishal Gupta
Government of India has recently issued a notification where they have allowed the import of compressors for one more year. So you can import compressors up to the 15th of April 2026. So compressor availability which was. Which was seeming to be an issue till two or three weeks back is largely resolved for at least one year. And hopefully by that time our compressor factory should be online.
Unidentified Participant
Okay. Okay. And on this compressor you there. Are you planning to import all components and then assembly or there is plan of manufacturing some of the components also
Vishal Gupta
some part. Some parts.
Unidentified Participant
Yeah.
Vishal Gupta
Some parts will be localized across the. And some parts will be importing from the overseas. Details cannot be given as of now till the time we sign off our agreement.
Unidentified Participant
Okay, thank you sir. And the other part in the projections. Which you are giving on the revenue numbers is there the EV business also part of the projections or the positions only of the rack and washing machine and refrigerator.
Vishal Gupta
So the guidance numbers, what we have shared is for PGEL separately and for Goodwood Electronics which is a JV company where we make TVs has been given separately. So for Goodworth that projection is around 855crore rupees. And for the TG Electroclass which combines product business, molding business, tooling business, our other electronic business which is around 6,400 crore rupees. So total is coming around 7,200 rupees at a group level.
Unidentified Participant
Okay, thank you sir.
Vishal Gupta
Thank you.
operator
Thank you. The next question is from the line of Meera Jagarwal, an individual investor. Please proceed.
Unidentified Participant
Can you hear me?
Vishal Gupta
Yes, Neeraji.
Unidentified Participant
Sir, congrats on the great set of numbers. I would just like to check on the inventory. So there is a very high rise on the inventory much more than our revenue growth. So any specific reason for that is there due to some kind of product mixtape. So we would like your guidance on that. And secondly like the 30, 35% growth that you forecast that is going to be for the next three Years. And what could be the growth beyond that here, if you can give some guidance on that as well. Thanks.
Vishal Gupta
See the inventory numbers are on a higher side. As I just told earlier because of the uncertainty on the compressor availability, we at a company level have taken strategic decisions of stocking the compressors. So in order to secure our AC business that is why we are seeing some elevated levels of inventory. Coming back to the second question three. We have already guided for 30, 35% growth for the FY26 and we hope to maintain this momentum for next two to three years. Anything beyond that will be very difficult to say right now.
Unidentified Participant
All right, thank you.
Vishal Gupta
Thank you.
operator
Hello. Thank you. The next question is from the line of Chavali Sharma, individual investor. Please proceed.
Unidentified Participant
Hi, good afternoon sir. Congratulations on achieving good set of members. Sir, I would like to know regarding refrigerators actually are you going to produce latest models or existing models only? My second question is are you having any plan to produce front loading washing machines in future?
Vishal Gupta
We as a company level we are always looking at new product categories in order to increase our dollar share with our clients. And the way the market trends are changing where consumer behavior is also changing and there is a certain shift from the semi automatic to top load and top load to front door.
So we are at the company level already, you know, developing such platforms in order to meet those evolving demands from our clients and customers. And as far as refitter is concerned, the capacity what we are putting up will be capable of making both DC and FF category of refutal and the supplies and the production will happen as per the customer demands.
Unidentified Participant
Thank you very much. Thank you.
Vishal Gupta
Thank you.
operator
Thank you. The next question is from the line of Archer Lohardi from Nirvama Institutional Equities. Please proceed.
Unidentified Participant
Thank you for the follow up opportunity. Sir, any update on the laptop opportunity?
Vishal Gupta
Nothing as of now, sir.
Unidentified Participant
Okay, Second question I had was with respect to you know, the components pli. Anything we would look at, you know, any opportunity we would consider in this and is it part of the meetings?
Vishal Gupta
Definitely. So this is not part of the characters what we have guided as of now. But we are always exploring business opportunities. We are looking at this also. We are talking to some of the probable partners in China and Taiwan. If something comes up, we will be definitely participating in this electronic component scheme.
Unidentified Participant
Understood. And just last question if I may. I don’t know if you will be able to. Just wanted to get a sense given the significant outperformance to the industry growth, you know, is it possible to get some number in terms of CBUs, what would be, you know the industry’s outsourced CBU mix and what would be our market share? Any ballpark number for FY25.
Vishal Gupta
Normally we don’t share these numbers and but we, I can very well tell you that we might be in kind of a leadership position in outsourcing category now.
Unidentified Participant
Right, right. Fair point sir. And respect to the EV business. So I think there was one question. So the electric vehicle that the client partner is yet to get the approval. So there is no capex, there is no revenue or anything of that sort. And yet this was to come through let’s say in this month, this approval. How much time would it take to set up and what kind of asset term would we look at?
Vishal Gupta
It will take three to four, four months for us to put up the capacity. The CapEx will not be very large and the asset terms will be very good. High asset turn business because initially it will be largely assembly and as the localization speeds up in India then the margins will start seeing some improvement but also with increased investment initially it will be largely a assembly kind of a job which we will start.
Unidentified Participant
Understood. And this last question if I may. With respect to the electronics segment, you know I think we’ve had about 350 crores of revenue. How do you see that shaping up over next two, three years? What kind of revenue size we can look at and what categories we could probably look at.
Vishal Gupta
We have already guided for next year in that we think we will be in the ballpark of 500 crore in that segment and we are working towards it. We are probably going to talk more about it once we have some more clarity. But we think that 2030% growth should be easily possible in that segment. It is a very small segment for us as of now and things can actually evolve quite significantly if we work towards it. And that’s the focus area in the company.
Unidentified Participant
Got it. Sorry, I’m again saying last sir, in terms of from an EMS perspective just I need the answer from an industry perspective in terms of the margins, how do they rank in terms of rac, ref and washing machines?
Vishal Gupta
The washing machine has the highest and then ref will be there and then probably rec will be at par or. Slightly lower than
Unidentified Participant
understood. Perfect. So this is very helpful. So thank you and wish you all the best.
Vishal Gupta
Thank you. Thank you.
operator
Thank you. The next question is from the line of Vipro Srivastav from Philip Capital. Please proceed.
Vipro Srivastava
Hello. Hello. Yes, thanks for allowing me follow up. So quickly on the rumor c demand. Side of the story. It’s obviously the the commentary from other peers. India has not been very positive. So what’s your take on the demand side and how do you see it evolving over next fiscal year?
Vishal Gupta
I think I have answered this question but just repeating I can answer it for myself at our end we continue to foresee good demand environment and I have taken into account all the basically forecast etc while we are giving a guidance so we remain pretty confident that we should be able to meet our guidance for next year.
Vipro Srivastava
Thank you. Thanks a lot.
Vishal Gupta
Thank you.
operator
Thank you. Ladies and gentlemen, I take this as the last question and would now like to hand the conference over to the management for closing comments.
Vishal Gupta
I thank all of you to participate in the conference and please feel free to contact me or the company for any further questions or any clarification. Thank you. Thank you very much.
operator
On behalf of JM Financial Institution securities limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Vishal Gupta
Thank you.