Shares of CG Power and Industrial Solutions Limited, a leading player in the Electrical Engineering Industry, witnessed a significant rally of 8.5% during Wednesday’s trading session, reaching Rs. 623.95 on the BSE. This surge was driven by the company’s impressive financial performance for Q3 FY25 and its ambitious Greenfield expansion plan worth Rs. 712 crores.
At 12:20 p.m., CG Power’s stock was trading at Rs. 610.8, up by approximately 6.3% from its previous close of Rs. 574.85. With a market capitalization of Rs. 93,376.5 crores, the stock’s positive movement reflects investor optimism following the latest earnings report and strategic growth initiatives.
Strong Q3 FY25 Financial Performance :CG Power
The company’s stock price saw volatility after it reported its Q3 FY25 financial results via filings with the stock exchange. The key highlights of its performance include:
- Revenue Growth: Consolidated total revenue from operations stood at Rs. 2,515.7 crores, marking a 4.3% quarter-on-quarter (QoQ) increase from Rs. 2,412.7 crores in Q2 FY25 and a notable 27% year-on-year (YoY) growth from Rs. 1,978.8 crores in Q3 FY24.
- Net Profit: The net profit for Q3 FY25 reached Rs. 237.8 crores, reflecting an 8.3% QoQ increase from Rs. 219 crores in Q2 FY25. However, it showed a YoY decline of approximately 68.2% from Rs. 747.7 crores in Q3 FY24.
- EBITDA Performance: The company’s EBITDA rose to Rs. 365 crores, demonstrating a strong 26% YoY growth compared to Rs. 2 crores in Q3 FY24. However, the EBITDA margin experienced a slight dip to 14.5% from 14.6% in the same quarter last year.
- Cash Flow & ROCE: Free cash flow generated for the quarter amounted to Rs. 216 crores, and the annualized Return on Capital Employed (ROCE) stood at an impressive 34%.
- Order Intake & Backlog: The company recorded a robust consolidated order intake of Rs. 4,390 crores, reflecting an 82% YoY surge. Meanwhile, its unexecuted order backlog stood at Rs. 9,706 crores, marking a 70% increase compared to last year.
Key Developments in Q3 FY25
Greenfield Expansion Plan
The company’s board has approved a significant Greenfield expansion plan involving an investment of Rs. 712 crores. The initiative aims to increase the power transformer manufacturing capacity by 45,000 MVA, raising the total capacity to 85,000 MVA by FY28. This expansion is expected to cater to the growing domestic demand while strengthening CG Power’s export capabilities.
Major Order for Train Collision Avoidance System (TCAS)
A subsidiary of CG Power, G.G. Tronics India Pvt Ltd., secured a prestigious order valued between Rs. 500-600 crores for the Locomotive Train Collision Avoidance System (TCAS), known as “KAVACH.” The project involves supply, installation, testing, and commissioning of the onboard system, along with 11 years of annual maintenance. The execution timeline for this project is one year.
Stock Performance Overview
CG Power has shown a mixed stock performance over different time frames:
- 1-Year Return: The stock has delivered a positive return of nearly 30%.
- 6-Month Return: A negative return of approximately 18%.
- 1-Month Return: A decline of around 17%.
About CG Power and Industrial Solutions Limited
CG Power operates in two key business segments—Industrial Systems and Power Systems. The company manufactures a wide range of products, including:
- Traction motors, propulsion systems, and signaling relays for Indian Railways.
- Induction motors, drives, transformers, switchgear, and other power and industrial sector equipment.
- Consumer appliances such as fans, pumps, and water heaters.
The company plays a crucial role in the Power, Railways, and Manufacturing sectors and has remained debt-free since FY23.
Financial Ratios and Market Data
- Market Cap: Rs. 95,640 Cr.
- Current Price: Rs. 626
- 52-Week High/Low: Rs. 875 / Rs. 420
- Stock P/E: 102
- Book Value: Rs. 23.0
- Dividend Yield: 0.21%
- ROCE: 46.6%
- ROE: 57.8%
- Face Value: Rs. 2.00
- Industry PE: 51.7
- Intrinsic Value: Rs. 112
- Debt: Rs. 30.2 Cr.
Conclusion
CG Power’s robust Q3 FY25 performance, coupled with its aggressive expansion plans and strong order intake, has instilled investor confidence. Despite some recent stock price corrections, the company’s long-term growth prospects appear promising, driven by its market leadership, strategic investments, and diversified business operations. Investors and market analysts will closely monitor the company’s execution of its Greenfield expansion and key projects in the coming quarters.
For more market insights, follow our blog.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.