CG Power and Industrial Solutions Limited delivered strong financial results for the first quarter ended June 30, 2026, with consolidated net profit rising 16.4% year-over-year to ₹313 crore compared to ₹269.2 crore in the corresponding period last year. However, the profit came in below the CNBC-TV18 poll estimate of ₹349 crore. Revenue demonstrated robust growth, increasing 14% to ₹3,281 crore from ₹2,878 crore a year earlier, but missed the CNBC-TV18 estimate of ₹3,500 crore. Operating performance was weaker than expected, with EBITDA increasing 4% to ₹397 crore from ₹381.7 crore year-over-year, against the poll estimate of ₹472.3 crore. EBITDA margin narrowed to 12% from 13.26% year-over-year and came in below the estimated 13.5%, indicating pressure on profitability. The company's other income surged significantly to ₹83.6 crore from ₹28.3 crore, and tax expense increased to ₹114.6 crore from ₹96.9 crore.
The company's consolidated order inflows reached ₹4,692 crore for Q1FY27, up 1% year-on-year, which was 8% ahead of Nomura's estimate. Revenue stood at ₹3,281 crore, up 14% year-over-year, while adjusted EBITDA (excluding one-offs) came in at ₹4.2 billion, up 9% year-over-year. However, adjusted EBITDA was 13% below Nomura's estimate and 10% below consensus estimate. Adjusted PAT of ₹3.3 billion was 11%/5% below Nomura's/consensus estimates. The miss on estimates was largely due to 55% higher-than-expected losses in semiconductors as CG continued to invest in the business to fuel growth, lower than expected Power Systems execution, and weak Industrial Systems profitability. Despite the weaker quarter, order inflows remained healthy with the unexecuted order backlog rising to ₹17,333 crore as of June 30, 2026.
The Power Systems business continued to drive growth, with revenue rising to ₹1,398.2 crore from ₹1,070.1 crore a year ago. Power Systems revenue/EBIT grew 30.6%/44% year-over-year, with EBIT margin expanding 212bp year-over-year to 23.2%, up 188bp versus estimates. However, this growth was below expectations of around 47%, indicating some execution challenges. The segment received orders worth ₹3,106 crore, taking its order backlog to ₹14,434 crore. This strong performance was driven by strong execution discipline and operating leverage. Nomura expects the Power Systems growth momentum to continue, led by a healthy order book of ₹14,434 crore (+59% year-over-year) and significant capacity expansion. The company aims to add 45GVA to its current power transformer capacity (75GVA) with 10GVA/30GVA/45GVA becoming operational in the first/second/third quarter of commissioning, completing full ramp-up at least 1 year before the original timeline of FY28E.
The Industrial Systems segment showed mixed performance, with order inflows/revenue growing 28%/6% year-over-year. However, Industrial Systems revenue rose only 5.8% against estimates of about 8%, indicating slower than expected growth. Excluding a one-off provisioning expense of ₹0.2 billion in the railways business, IS EBIT margin stood at 8.7%, down 144bp/22bp year-over-year/quarter. The nascent Semiconductor business generated ₹94 crore in revenue during the quarter but remained loss-making, with the segment reporting a ₹49.9 crore EBIT loss, sharply higher than the ₹8.7 crore loss recorded in the corresponding quarter last year as investments in the business continued. The motors business showed double-digit year-on-year order growth, supporting overall segment performance.
CG Power and Industrial Solutions Limited shares declined by 2.59% to ₹860.90 during Friday's trading session, as reported by Moneycontrol. Despite the earnings miss, the stock recovered from day's lows after the results announcement and ended Friday's session nearly unchanged at ₹883. Following the quarterly performance, Nomura cut FY27F EPS by 5% to factor in the Q1FY27 miss while FY28-29F estimates are largely unchanged. The brokerage maintained its 'Buy' rating with an unchanged target price of ₹1,100, noting that the stock trades at 59x/47x FY28F/29F EPS. Macquarie reiterated its 'Outperform' rating with a target price of ₹1,090, highlighting the company's 45% growth in order backlog supported by strong demand across the power segment and expecting earnings to grow at a CAGR of 31% over FY26-29. UBS retained its 'Buy' rating with a target price of ₹1,070, noting that order inflows remained resilient and exceeded projections. Jefferies maintained its 'Hold' rating with a target price of ₹855, lowering its FY27 earnings estimate by 4% due to continued semiconductor losses and weaker Industrial Systems margins.
The company announced significant expansion plans during the quarter, including the establishment of two brownfield manufacturing units - one for switchgear and its Energy and Power Distribution (EPD) segment, along with another brownfield manufacturing unit in Nashik. Additionally, the board approved a brownfield expansion of its Extra High Voltage (EHV) Gas Insulated Switchgear (GIS) manufacturing facility at Vilholi, Nashik. The project, with an estimated cost of ₹35.2 crore (net of taxes), will double the plant's manufacturing capacity to address a growing order pipeline. The expansion is expected to be completed within four to six months and will be funded through internal accruals and/or equity. CG Power has secured a 50% offtake commitment from Renesas for its OSAT facility, strengthening its semiconductor business prospects. The company also highlighted plans to increase transformer capacity from 75,000 MVA to 120,000 MVA by FY27, a year ahead of schedule, supported by strong demand in both domestic and export power markets.
The latest Q1 FY27 results build on CG Power's exceptional performance in the quarter ending March 2026, where consolidated revenue demonstrated robust growth of 25.03% year-over-year from ₹2,752.77 crore to ₹3,441.76 crore. Net profit had surged by 32.52% year-over-year to ₹363.46 crore, while EPS rose to ₹2.31. The company's five-year revenue trajectory shows exceptional growth from ₹5,561.40 crore in 2022 to ₹12,417.95 crore in 2026, representing a substantial 123% growth over the period.
The company has announced several recent corporate actions, including the board meeting scheduled for July 24, 2026, to consider Q1 FY27 results. On July 17, 2026, the company allotted 34,660 shares under its ESOP Plan 2021. CG Power has maintained a consistent dividend policy, declaring interim dividends of ₹1.30 per share in January 2026 and March 2025, with a higher interim dividend of ₹1.50 per share declared in March 2023. The company's financial position remains robust with a Debt to Equity ratio of 0.00 from 2023 to 2026, indicating a strong balance sheet position.
