Multibagger stock PG Electroplast surges 15%, hits 52-week high; more steam left?

Shares of PG Electroplast Ltd surged more than 15 per cent during the trading session on Tuesday after the consumer durable player announced its foray into electric vehicle assembly and lithium-ion battery assembly through its wholly owned subsidiary.

PG Electroplast (PGEL), an electronic manufacturing services and plastic molding player, through its wholly owned subsidiary, PG Technoplast has signed a definitive agreement with Spiro Mobility to become an exclusive manufacturing partner for manufacturing of the EVs of Spiro Mobility (Spiro) in India, said the company in an exchange filing.

"The primary responsibility of PG Technoplast will be setting up and managing the manufacturing facilities for electric vehicle, lithium-Ion batteries and related components and for procurement and raw materials for the same as specified by Spiro," it added. "Spiro shall be responsible for research and development, marketing, sale, and distribution of the EV products manufactured by PG Technoplast."

Following the announcement, shares of PG Electroplast rallied more than 15 per cent to Rs 718.35, hitting its new 52-week highs, commanding a total market capitalization of more than 18,000 crore. The scrip had settled at Rs 624.65 in the previous trading session on Monday.

"The company’s entry into EV and lithium-Ion batteries manufacturing opens up a new horizon of growth for the company and with Partner like Spiro, the company is confident that this association will go a long way and become a sizeable player in the EV market in India," said Vishal Gupta, Managing Director (Finance), PG Electroplast.

Shares of PG Electroplast have delivered multibagger returns to the investors in the last one year as the stock has zoomed nearly 400 per cent from its 52-week low at Rs 146.02 in March 2024. The stock has soared nearly 200 per cent in the last six-month period, while the stock is up 20 per cent in the last one month.

PG Electroplast has delivered a standout Q2FY25, led by strong performance in the product business, beating expectations by 10 per cent. Ebitda shot up 50 per cent YoY while adjusted PAT rose 56 per cent YoY, showcasing PGEL's operational strength and market resilience well beyond expectations, said Nuvama Institutional Equities.

Management have raised their revenue/PAT guidance, underscoring PGEL’s strong momentum. We reckon it shall post a revenue and PAT CAGR of 29 per cent and 43 per cent over FY24–27E, valuing the stock at 50 times Dec-26E EPS yielding a TP of Rs 765, it added with a 'buy' rating and citing unfavourable weather conditions and delay in new category ramp-up as Key risks.

PG Electroplast is an electronic manufacturing services (EMS) and contract manufacturing solution provider to leading consumer durable and electronics brands in India. It has one of the biggest capacities in Plastic Injection molding and has capabilities across the value chain in original equipment manufacturing (OEM) and original design manufacturing (ODM) products