Broker’s call: Pearl Global (Buy)
JM Financial
Pearl Global Industries (PGIL) is a turnkey global apparel manufacturer with 25 plants in five countries, including India, Bangladesh, Vietnam, Indonesia, and Guatemala. The company offers design, sourcing, and full-package manufacturing services to global apparel brands, with production allocated based on factors such as tariff exposure, customer needs, product complexity, and proximity to end markets.
In FY26, PGIL absorbed ₹36 crore of tariff burden imposed by US duties, but managed to increase its EBITDA margin to 9.2 per cent by shifting orders to Bangladesh and Vietnam. The company's revenue, EBITDA, and PAT compound annual growth rates (CAGRs) are estimated to be 16, 24, and 29 per cent, respectively, from FY26 to FY29. With a balance sheet expected to turn net cash by FY29E, factoring in capex of about ₹200 crore per year, PGIL is initiated with a Buy rating and a target price (TP) of ₹1,610, which is 25 times the FY29E EPS.
The primary risks include US consumer demand, trade policy, concentration (geo, customer), India ramp-up, Vietnam realization, and foreign exchange.
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