Stock Snapshot
Price Performance
Recommendation Rationale
Strong growth outlook supported by capacity expansion and robust order inflows.
Basis of our Recommendation
CG Power is poised for significant growth, driven by strong performance in the Power Systems segment and a substantial order backlog providing over two years of revenue visibility. The company is aggressively expanding its manufacturing capacity, particularly in transformers and semiconductors, to capitalize on rising domestic and export demand. While there are risks related to margin pressures and execution challenges, the overall outlook remains optimistic, supported by favorable market dynamics and strategic initiatives.
Why We Like This Stock
- Record performance with highest-ever standalone revenue and order book
- Significant growth in the Power Systems segment with a 50% YoY sales increase
- Strategic capacity expansions targeting high-growth segments like data centers and renewable energy
Things To Watch Out For
- Margin pressures in the Industrial Systems segment due to competitive pricing and commodity costs
- Execution risks associated with the semiconductor venture and supply chain constraints
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 8,046 | 9,909 | 12,418 | 15,039 | 18,029 |
| Profit Before Tax (Cr.) | 1,113 | 1,312 | 1,592 | 2,000 | 2,429 |
| PBT Margin | 13.8% | 13.2% | 12.8% | 13.3% | 13.5% |
| Net Profit (Cr.) | 1,670 | 1,137 | 1,172 | 1,480 | 1,798 |
| EPS | 10.6 | 7.2 | 7.4 | 9.4 | 11.4 |
Company Overview
Show Company Profile
CG Power and Industrial Solutions Limited, together with its subsidiaries, provides various solutions in India and internationally. The Power Systems segment offers generator, distribution, solar, green, unit auxiliary, furnace, cast resin, locomotive, and track side transformers; shunt reactors; and switchgears, relay and automation, circuit breakers, condenser bushings, lightning and surge arresters, off load disconnectors, isolators, compact substations, numerical protection relays, auto-reclosers, vacuum interrupters, power quality solutions, and railways loco head and trackside products. This segment also undertakes turnkey transmission and distribution projects; and substation projects. The Industrial Systems segment provides traction motors, AC generators, drives and automation solutions, soft starters and shaft power monitors, domestic and commercial fans, traction electronics and machines, water heaters, and services for industrial systems, as well as residential, agricultural, and specialty pumps. The Semiconductors segment engages in the outsourced semiconductor assembly and test; and radio frequency business. The Others segment offers adhesive tapes and labels. It serves steel and metals, cement, textile, fertilizer, chemical, oil and gas refineries, sugar, automobile, FMCG, electronics, building and infrastructure, defense, paper, pharmaceutical, metro rail, railways, thermal, nuclear power, mining, data centers, IT and telecom, green hydrogen, water and irrigation, power transmission and distribution, and port and shipping sectors, as well as renewables, such as solar, floating solar, wind, and hydro industries. The company was formerly known as Crompton Greaves Limited and changed its name to CG Power and Industrial Solutions Limited in February 2017. The company was incorporated in 1937 and is headquartered in Mumbai, India. CG Power and Industrial Solutions Limited operates as a subsidiary of Tube Investments of India Limited.