One of the large-cap semiconductor stocks engaged in providing end-to-end solutions to utilities, industries, and consumers for the management and application of efficient and sustainable electrical energy. The stock has jumped by 3.59 percent after securing a KAVACH order worth Rs. 500-600 crore from Chittaranjan Locomotive Works.
Stock movement:
With a market capitalization of Rs. 1,16,290.42 crores, the shares of CG Power and Industrial Solutions Limited were trading at Rs. 760.80 per equity share, rising nearly around 3.59 percent from its previous day’s close price of Rs. 734.70.
What Happened:
G.G. Tronics India Private Limited (GGT), a subsidiary of CG Power and Industrial Solutions Limited, has secured a significant KAVACH order worth Rs. 500-600 crore from Chittaranjan Locomotive Works, West Bengal.
The order involves the supply, installation, testing, and commissioning of onboard KAVACH safety equipment, along with wiring, cabling, and an 11-year maintenance contract. This project is to be executed within one year and underscores GGT’s leadership in railway electronic signaling systems.
Market Segments
CG Power operates in two key segments, which include power systems and industrial systems. Power systems include transformers, switchgear, and circuit breakers for power transmission and distribution.
Industrial Systems offers motors, drives, automation products, and railway solutions like rolling stock equipment and signaling systems, catering to diverse industrial and transportation applications with a focus on efficiency and innovation.
Acquisition and Expansion Plans:
The company is building an OSAT (outsourced semiconductor assembly and test) facility with leadership in place and is focused on long-term investments in semiconductor design, especially in wireless communication and SATCOM.
The company supports its acquisition and expansion plans and has proposed a qualified institutional placement (QIP) of Rs. 3,500 crore.
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Future Growth Plans:
The company aims to drive growth through operational and commercial excellence, expand exports, and enhance motors and drives offerings. Anticipated growth in power systems is supported by increased government transmission capacity.
Recent milestones include acquiring a 55% stake in G.G. Tronics for Rs. 319 crore, entering semiconductor design with the radio frequency components business of Renesas for $36 million, and expanding transformer capacity to 40,000 MVA with a Rs. 27 crore investment.
Recent quarter results and ratios:
CG Power and Industrial Solutions Limited’s revenue has increased from Rs. 2,002 crore in Q2 FY24 to Rs. 2,413 crore in Q2 FY25, which has grown by 20.53 percent. The net profit of CG Power and Industrial Solutions Limited dropped by 9.09 percent, from Rs. 242 crore in Q2 FY24 to Rs. 220 crore in Q2 FY25.
CG Power and Industrial Solutions Limited’s revenue and net profit have grown at a CAGR of 39.30 percent and 3.71 percent, respectively, over the last three years.
In terms of return ratios, the company’s ROCE and ROE should be 46.6 percent and 57.8 percent, respectively. The debt-to-equity ratio of the company is to be 0.01x, which shows the company is almost debt-free. CG Power and Industrial Solutions Limited’s EPS is to be Rs. 9.45.
Company Overview:
CG Power and Industrial Solutions Limited was formerly known as Crompton Greaves Limited and is a leading Indian multinational company specializing in electrical engineering. The company was established in 1937 and headquartered in Mumbai. CG Power has evolved into a significant player in the power generation, transmission, and distribution sectors.
Written By – Nikhil Naik
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