Shares of PG Electroplast Ltd. surged as much as 9% on Wednesday, March 25, following the company's announcement that current room AC production has been 'almost normalized'. According to reports from CNBC TV18 and Upstox, the stock was trading ₹546.9 on the National Stock Exchange (NSE) after the announcement, though it remains down 13.5% over the past month. The market response reflects investor confidence in the company's ability to overcome production constraints that had previously impacted operations. This positive momentum extended to the broader AC manufacturing sector, with Blue Star shares trading 5% higher at ₹1,747.4 and Voltas gaining 4.5% to ₹1,360.5 on Wednesday.
In an exchange filing on March 25, PG Electroplast revealed that it was able to identify and install alternative solutions to LPG at its production facilities, resulting in the near-normalization of room AC production. As reported by CNBC TV18 and Upstox, the company stated that with these current alternative solutions, it has been able to address the LPG challenges to 'a large extent for the time being'. This development addresses the constraints the company had been facing due to the ongoing war in West Asia, which had resulted in gas suppliers restricting supply and impacting room AC production in some plants. The company's ability to implement these solutions has provided relief to its key clients, including Blue Star, Voltas, Lloyds, and Whirlpool of India, which collectively account for nearly 74% of PG Electroplast's topline for the first nine months of the current financial year.
According to CNBC TV18 reports, PG Electroplast had earlier informed exchanges about facing LPG gas constraints due to the ongoing war in West Asia, which had resulted in gas suppliers restricting supply and impacting room AC production. In an interaction with CNBC TV18 on March 13, Vikas Gupta of PG Electroplast had indicated that the LPG shortage had impacted production lines and may affect the company's financial year 2026 revenue guidance. Gupta also noted that March accounts for 12% to 15% of the company's annual sales. The production stoppage had been particularly challenging as it coincided with the onset of summer season in India, where heatwave warnings have already been issued across many parts of the country, thereby increasing demand for coolers and ACs.
Despite the positive production developments, PG Electroplast continues to face other market pressures as reported by CNBC TV18. Gupta highlighted that polymer availability and a 40% to 50% surge in polymer prices remain concerns for the company. The company's ability to address the immediate LPG challenges through alternative solutions provides some relief from the production constraints that had previously impacted operations and financial guidance. However, the broader AC manufacturing sector continues to face headwinds, with Havells India shares down 9% in the last month despite gaining 4.2% on Wednesday to trade at ₹1,285.8, and both Havells India and Voltas having declined 23% from their respective 52-week highs.
