PG Electroplast PE Ratio—Is the Stock Expensive?

PG Electroplast, a rising star in India's electronics manufacturing sector, has seen its stock price skyrocket. But with a current price-to-earnings (PE) ratio of 73.6, investors are asking–is this growth story getting too pricey?

Why it matters: as India's electronics market booms, homegrown manufacturers are seizing the opportunity. Growth has skyrocketed for many, but high valuations could signal investor exuberance outpacing fundamentals.

By the numbers:

• PG Electroplast stock price has more than tripled in the last 12 months
• Market cap stands at $1.67 billion
• Company made ₹3,390 in sales, and ₹185 crore profits in the last 12 months
• 3-year sales CAGR: 57%

Context: while PG electroplate trades at a high PE, the company is ranked 9th by PE across the overall electronics and components segment in India.

Between the lines: PG Electroplast has transformed from a component maker into a diversified manufacturing powerhouse, which gives investors confidence in offering a premium valuation.

• 2nd largest original device manufacturer for washing machines and ACs in India
• Partnerships with major brands like Voltas and Lloyd
• Produces over 15,000 metric tons of plastic components annually
• Manufactures Google-certified Android TVs
• Expanding into engineered plastics for automotive and sanitary ware

Yes, but: The current PE ratio of 73.6 is significantly higher than the industry median, suggesting the stock may be priced for perfection.

• Promoter holding has decreased by 12.3% over the last 3 years
• Competition in the electronics manufacturing space remains fierce
• Any hiccups in execution could lead to a sharp correction

The bottom line: While PG Electroplast's growth story is compelling, investors should approach with caution at current valuations.

The company's ability to maintain its stellar growth trajectory will be crucial to justify its premium price tag.