Indian benchmark indices Sensex and Nifty ended Friday’s trading session slightly higher. At close, the BSE Sensex was at 81,086.21, up by 33.02 points, or 0.04 percent, while the Nifty 50 was at 24,823.15, up marginally by 11.65 points, or 0.05 percent.
Listed below is a large cap stock that has delivered multibagger returns of over 3,400 percent to its stakeholders in 4 years:
CG Power & Industrial Solutions Ltd
With a market capitalization of Rs. 1,15,007 crores, the shares of CG Power & Industrial Solutions Ltd started Friday’s trading session on a higher note at Rs. 743 compared to its previous close of Rs. 740.65. During the trading session, the shares hit a high of Rs. 754.95, gaining around 2 percent and closed the day at Rs. 750 apiece.
Looking at the company’s financial performance, the revenue increased by around 2 percent from Rs. 2,192 crores during the March quarter to Rs. 2,228 crores in the June quarter. On the other hand, the net profits jumped by around 3 percent from Rs. 234 crores to Rs. 241 crores during the same period.
Comparing the same metrics on a YoY basis, the revenue zoomed by around 19 percent from Rs. 1,874 crores during Q1FY24 to Rs. 2,228 crores in Q1FY25. In addition, the net profits surged by around 18 percent from Rs. 1,874 crores to Rs. 2,228 crores during the same timeframe.
In August 2020, the stock price was trading at Rs 21 exhibiting a gain of around 3,424 percent compared to the current price. For example, if someone had invested Rs. 10,000 into the company’s stock four years ago, it would have converted to approximately Rs. 3.42 lakhs now.
CG has two business lines—Industrial Systems and Power Systems. It manufactures Traction Motors, Propulsion Systems, Signalling Relays etc., for the Indian Railways, and a wide range of Induction Motors, Drives, Transformers, Switchgears, and other allied products for the Industrial and Power sectors.
Recently, the company also made a foray into the business of Consumer Appliances such as Fans, Pumps, and Water Heaters. The company has world-class manufacturing plants across 9 locations in India and one in Sweden.
Previously, the Government of India approved the company’s application to set up an OSAT facility under various policies, including the Central and State level schemes and the Gujarat Semiconductor Policy.
The facility will be established in Sanand, Gujarat, as a joint venture with Renesas Electronics Corporation and Stars Microelectronics (Thailand) Public Co. Ltd. The project, with an investment of Rs. 7,600 crores over five years, will produce a range of semiconductor packages, including legacy and advanced types, with a daily production capacity of 15 million units.
The project will benefit from capital subsidies and other incentives. In this venture, CG Power will hold a majority stake of 92.3 percent, while Renesas and Stars Microelectronics will have stakes of approximately 6.8 percent and 0.9 percent respectively.
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 47.29 percent and a return on capital employed (RoCE) of 37.02 percent for the period spanning FY23-24. Further, the net profit margin stood at 17.74 percent during the same timeframe.
According to the latest shareholding pattern, Promoters own 58.09 percent of the shares, Foreign Institutional Investors (FIIs) hold 14.64 percent, Domestic Institutional Investors (DIIs) have 11.07 percent, and Retail Investors possess the remaining 16.19 percent.
CG Power & Industrial Solutions, a company with over 85 years of history and previously managed by various groups, was acquired by Tube Investment, a Murugappa Group company, with an investment of Rs. 700 crores in FY2020.
The company is a global leader in delivering comprehensive solutions for the management and application of efficient and sustainable electrical energy. It provides products, services, and solutions across two primary business segments: Power Systems and Industrial Systems.
Written By Vaibhav Patil
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