PG Electroplast (PGEL)

FairStock Score: 45/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Five-year revenue CAGR of 47.27%, with latest sales growth of 35.80% and profit growth of 30.55%
• Sound balance sheet: D/E 0.20, Altman Z-Score 4.02, Piotroski F-Score 7/9
• ROCE of 19.36% shows decent operational returns on capital
• Promoter holding at 43.41% aligns owner interest

Concerns

• Extremely rich valuation: P/E 64.70, P/B 5.55, price ₹550.50 vs Graham Number ₹164.20; margin of safety -282.40%
• Free cash flow is deeply negative at ₹-1,278 Cr despite reported profits
• ROE of 9.79% is mediocre for such a high multiple, and dividend yield is negligible at 0.04%
• Negative EV/EBITDA of -73.92 is an unusual financial indicator that needs scrutiny

AI Analysis

Let me begin with what I like. PG Electroplast is growing like a fine business: five-year revenue CAGR of 47.27%, latest annual sales growth of 35.80%, and profit growth of 30.55%. The latest quarter had ₹1,412 Cr in sales and ₹62 Cr in net profit. That kind of execution is not easy in consumer electronics. The balance sheet is also reasonable: debt-equity is 0.20, ROCE is 19.36%, Altman Z-score is 4.02, and Piotroski score is 7/9. Promoters still hold 43.41%, so owners' money is on the line. But Graham taught me that growth is a component of value, not a substitute for it. Today the price is ₹550.50, market cap ₹17,917 Cr, P/E 64.70, and P/B 5.55. Book value is just ₹99.12. The Graham Number, a rough anchor for a conservative buyer, is ₹164.20. Buying here means accepting a margin of safety of roughly -282%. That is not protection; it is speculation. The PEG ratio of 1.08 sounds reasonable only if the 30% growth rate continues flawlessly, and value investors do not pay for flawless forecasts. I am also troubled by free cash flow of ₹-1,278 Cr. Reported profit is not yet cash in hand. ROE of 9.79% is modest for a company valued like a compounder, and a dividend yield of 0.04% means minority shareholders reap almost nothing while waiting. This is a fast grower, perhaps a good business, but not a cheap one. My circle of competence says wait for a better price, or watch for cash flow to catch up with reported earnings.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer