This Murugappa group company, which is foraying into semiconductors, and conducts business in rail systems, and others, is in focus after an agreement for Vande Bharat trainsets worth upto Rs. 450 crore
Price Movement
CG Power & Industrial Solutions Limited‘s stock in Wednesday’s session touched a day’s high of Rs. 620.50 which is 2.03 percent. The stock reiterated from the day’s high and was trading at Rs. 595.55, which is 2.07 percent lower than the previous closing price of Rs. 608.15.
The stock has delivered a return of around 31 percent in the past year and has outperformed the Nifty Index in the same period.
What Happened
The company’s stock is in focus after entering into a long-term agreement with Kinet Railway Solutions Limited for the supply of servicing railway products, which includes propulsion kits with motors, transformers, and various other items.
As part of the agreement, the first purchase order, which ranges between Rs. 400 crores to Rs. 450 crores, for the supply of railway products for 10 Vande Bharat trainsets. They have received a separate 35-year service order which is a part of the agreement.
Further, the company has informed about the execution of Agreement on Asset Purchase with Renesas Electronics America Inc. for the acquisition of Radio Frequency Component business related to the Semiconductor business. They have received regulatory approval from the Committee on Foreign Investment in the U.S and obtained on 10th March 2025.
Business Segments
As per the recent December 2024 results, the company recognizes 36.56 percent of its operational revenue from Power Systems, 63.22 percent from Industrial Systems, and the remaining 0.22 percent from others.
The Industrial system contributes more than the power systems in the operating profit. However, power systems have contributed to higher margins in Q3FY25.
Future Plans
The company plans to invest around Rs. 688 crores for capex to improve operational efficiency. The plan includes Low-tension motors in Ahmednagar and Goa by increasing from 10 lacs to 18 lacs units p.a. with a plan of Rs. 327 crores.
Power Transformers in Bhopal by increasing from 17,000 to 40,000 MVA with a cost of Rs. 131 crore. Distribution Transformer in Gwalior increasing from 6,900 to 9,900 MVA with a cost of Rs. 40 crore.
High tension motors in Bhopal by increasing from 1,008 to 1,728 units p.a. with a cost of Rs. 35 crore and Switchgears in Nashik with a cost of Rs. 155 crore. CG Power has invested in G.G.Tronics with an investment value of Rs. 319 crore and acquired Rs. 55 crore, which is into KAVACH systems.
Financial Performance
Their Q3FY25 results show revenue from operations of Rs. 2,516 crore which increased by 27.13 percent year on year, from Rs. 1,979 crore in Q3FY24. Their net profit declined by 68.18 percent year on year, from Rs. 748 crores in Q3FY24 to Rs. 238 crores in Q3FY25.
About the company
CG Power & Industrial Solutions Limited is headquartered in Mumbai. It is a leading engineering conglomerate established in 1937. They specialize in electrical engineering and offer a portfolio that includes power systems, consumer products, and industrial systems. Their business model focuses on providing end-to-end solutions for power transmission, distribution, and industrial applications.
The order backlog as of December 2024 in Industrial systems was Rs. 3,712 crore and power systems was Rs. 5,984 crore.
Written by Santhosh S
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses
