PG Electroplast Eyes Expansion Amid Tariff Shifts

5 Apr 2025 , 12:31 AM

PG Electroplast Ltd, with an office in Greater Noida, is preparing to expand its electronics component business, which now accounts for less than 10% of its overall revenue.

Vikas Gupta, Managing Director, informed that the company has big expansion plans in this segment and wants to substantially increase its footprint in the electronics manufacturing industry. Even with recent tariff increases by the United States on Chinese imports, PG Electroplast is not impacted because it does not have direct exports to the US.

Gupta pointed out that the Indian electronics sector would gain in the long run from these tariff changes, as India gets an arbitrage benefit over China and Vietnam in the global trade environment.

The firm is also considering the Production Linked Incentive (PLI) scheme introduced by the Indian government for manufacturing electronic components, to enhance local production and connect with global supply chains.

Being an Electronics Manufacturing Services (EMS) company, PG Electroplast is seeing strong demand for air conditioners prior to the summer season. Gupta said the company is adequately stocked and ready for the peak season April, May, and June and is looking forward to a good sales pick-up. But he warned that if demand goes up by over 20–25%, some players in the industry will run short of compressors, although PG Electroplast is well-insulated from such risks.

In a significant backward integration step, the company announced plans to establish a ₹350 crore air conditioner compressor manufacturing plant. The new factory is likely to be margin accretive, with 50% of the compressors going towards in-house AC production and the remaining 50% being supplied to third-party customers.

Commercial production of the new plant is scheduled for the second half of 2026, representing a pivotal moment in PG Electroplast’s long-term growth plan.