Shares of PG Electroplast (PGEL) are in focus after brokerage firm Nuvama maintained 'buy' rating on the stock, while cutting the target price from Rs 800 to Rs 780 amid disruption in LPG supply, which is expected to impact fourth-quarter results.
The LPG supply issue at the Supa facility will severely impact Q4 performance; however, Q1 may partially compensate for it, said Nuvama.
PGEL informed exchanges that its gas supplier intimated regarding the shortage of gas under the existing Gas Sale and Purchase Agreement on account of the ongoing conflict in the Middle East. This led to a partial shutdown of PGEL's Supa facility, while operations in the north continue.
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The company is currently looking at substitutes such as oxy-acetylene, while awaiting approval from customers. Following the approval, the operations in the facility will restart. However, the disruption is expected to have a large impact on PGEL's Q4 performance.
"We cut our FY26E/27E estimates by 14%/1% respectively to reflect the weak Q4 and modest margin impact in FY27 due to substitute fuel. We maintain ‘BUY' with a revised Mar'27E TP of INR780 (earlier INR800), basis 45x FY28E EPS," Nuvama said.
Notably, several companies are witnessing some impact due to the LPG disruption, especially those located in Maharashtra, which have seen a material reduction in supplies. PNG supplies have already been cut by 20% from March 9, 2026, onwards. Several companies have expressed their ability to manage production for the coming one to two weeks, after which it might be difficult to operate in full capacity, the report said.
Even though LPG disruption beyond two weeks from now can impact the season, it takes typically two to four weeks for products to reach retail touchpoints. Therefore, the brands are unlikely to see a material impact in Q4FY26, according to Nuvama. Meanwhile, Q1FY27 performance will be based on the season's performance, cost inflation, and availability.
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