CG Power Share Price in focus: CG Power and Industrial Solutions Ltd on Wednesday, May 6, reported a 32 per cent rise in consolidated net profit to Rs 362 crore in the March quarter, mainly on the back of higher revenues. The company’s consolidated net profit stood at Rs 274 crore in the year-ago period, the company said in a press statement.
Following the Q4 results, the brokerages Emkay and Nuvama Research are bullish on this power stock, a constituent of the BSE 200. Here’s why they are bullish: check their rating along with the latest target price.
The brokerage noted that the company delivered a stronger-than-expected Q4FY26 performance, with revenue, EBITDA, and PAT rising 25%, 29%, and 25% year-on-year to Rs 34.4 billion, Rs 4.7 billion, and Rs 3.6 billion, respectively.
However, Industrial Systems performance was muted, with challenges in the Railway business.
EBITDA margin improved by 40 bps YoY to 13.6 per cent, mainly led by higher profitability in Power Systems.
With rising input costs, the company has taken a 17 per cent price hike in the Motor business over the last four quarters.
4Q order inflow grew 39 per cent YoY to Rs 53.4 billion, resulting in an order backlog of Rs 171 billion, up 61 per cent YoY.
Besides the domestic market, we see exports as among the large growth opportunities, supported by a global energy transition drive and data-centre capex.
The brokerage firm, Nuvama Research, retains a BUY rating, as accelerated transformer capex is expected to drive strong growth in the higher-power segment, while additional growth levers are emerging through GIS in FY27, exports, and semiconductors from FY29 onward.
Railways supported by GG Tronics’ order book of Rs 10 billion. The firm is raising its FY28E EPS estimate by 11 per cent, with FY28E operating profit margins projected at 14.8 per cent, resulting in an estimated EPS CAGR of nearly 39 per cent over FY26-28E.
Accordingly, the brokerage firm revised its bull-case target price to Rs 955, including OSAT contributions, based on a 60x multiple of FY28E EPS. At the current market price, the stock is trading at 79x FY27E EPS and 56x FY28E EPS.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
