Key Expansion Highlights
✅ New AC compressor manufacturing facility with ₹350 crore investment
✅ 50% production for in-house AC units, 50% for external customers
✅ Production to begin H2 2026, expected to be margin-accretive
✅ Strengthens backward integration for PG Electroplast’s AC business
✅ Focus on growing electronics components segment
Strategic Rationale Behind the Investment
1. Enhancing Self-Sufficiency in AC Manufacturing
- Reduces dependency on third-party compressor suppliers
- Improves cost efficiency & supply chain control for PG’s AC division
2. Expanding Electronics Business Footprint
- Currently <10% of revenue – plans to scale up significantly
- Aligns with India’s growing electronics manufacturing ecosystem
3. Capitalizing on India’s Booming AC Market
- Room AC market growing at ~12% CAGR (2024-30)
- Government push for energy-efficient cooling solutions
Management Commentary
Vikas Gupta, Managing Director, PG Electroplast:
“This investment marks our strategic shift toward vertical integration. While electronics currently contributes less than 10% to our revenues, we see tremendous growth potential in this vertical alongside our compressor business.”
Market Implications
🔹 Competitive edge against AC brands relying on imported compressors
🔹 Potential margin expansion through in-house component manufacturing
🔹 Strengthens positioning as integrated electronics & durables player
Project Timeline & Next Steps
📌 Plant construction begins: Q3 2025
📌 Commercial production starts: H2 2026
📌 Future roadmap: Possible exports & tech collaborations
