CG Power and Industrial Solutions shares surged over 4% to hit a 52-week high of ₹863.80 on the NSE on Thursday following strong quarterly results. According to The Hindu BusinessLine, the stock was trading at ₹860.25 at 10:12 am, compared with the previous close of ₹828.90. The Murugappa Group company's shares have demonstrated significant momentum, reflecting investor confidence in the company's financial performance and growth prospects across sectors. The stock is currently trading around ₹830 with a 52-week range of ₹525.50 to ₹846.90, with its market value exceeding ₹1.30 lakh crore, making it a major name in India's industrial manufacturing sector.
The company reported a 32% year-on-year rise in consolidated net profit to ₹363 crore for the quarter ended March 2026 (Q4 FY26), as reported by The Hindu BusinessLine. This growth was supported by healthy demand across its power systems and industrial businesses, with the company benefiting from robust demand for transformers and switchgear in the power systems segment across domestic and export markets. The strong quarterly performance has reinforced investor confidence in the company's operational efficiency and market positioning across its key business segments. Full-year revenue for fiscal year 2026 increased by 25% to ₹12,418 crore, with the company securing ₹19,616 crore in new orders, a 33% jump from FY25, showing steady demand across its businesses.
Speaking during the company's Q4 FY26 earnings call, Managing Director and CEO Amar Kaul announced that CG Power is actively evaluating a pipeline of semiconductor design opportunities and acquisitions to strengthen its technology stack through subsidiary Axiro. According to Moneycontrol, Kaul said the company is looking at a pipeline of candidates on potential M&A to keep building on its design capability, with the first focus area being RF design capability. The company recently invested in Japanese fabless semiconductor company EdgeCortix, which specialises in energy-efficient AI processing, alongside Japan-based venture capital fund MPower Partners. Kaul emphasized that rapid advances in AI are creating opportunities for further strategic investments, stating "You'll see more and more of these investments coming into even these startups or these kind of companies, where we will get to know the latest in the world that is happening."
CG Power is simultaneously scaling up its outsourced semiconductor assembly and test (OSAT) business through CG Semi. The newly launched G1 facility in Sanand, Gujarat, is among India's first end-to-end OSAT plants, with a peak production capacity of 0.5 million units per day. A second facility, G2, is under construction and expected to be completed by the end of 2026, with planned capacity of about 14.5 million chips per day. The semiconductor business continued to weigh on near-term profitability, with management saying continued investments in semiconductor talent and operations had an impact of ₹38 crore on quarterly margins. However, CFO Susheel Todi clarified that around ₹500 crore in semiconductor revenue booked during FY26 came from the RF business acquired from Renesas and housed under Axiro.
Brokerage firm Motilal Oswal reiterated a buy rating on the stock with a target price of ₹940, citing strong growth prospects across segments and improved margin outlook. According to The Hindu BusinessLine, the brokerage marginally revised its earnings estimates upward by 6% for FY27 and 5% for FY28 to factor in better margins in the power systems business and improved balance sheet metrics. Motilal Oswal expects overall order inflows to post an 11% CAGR over FY26-28, driven by robust demand for transformers and switchgear in the power systems segment across domestic and export markets, while industrial segment order inflows will be supported by expansion in motors and railway-related businesses. Analysts forecast 15-18% annual revenue growth through 2027, with the semiconductor business expected to boost margins from 2027 onwards.
Motilal Oswal models a revenue CAGR of 25% over FY26-28 and EBIT margins of 13.9% and 15.1% for FY27 and FY28 respectively, leading to a projected PAT CAGR of 32% over the same period. The company's finances remain strong with almost no debt and a return on equity consistently above 27%. Despite current strong finances, risks remain including the company's high P/E ratio of over 113, which suggests current prices might not fully reflect potential integration issues or economic challenges facing the industrial sector. Most analysts rate the stock a 'Buy' but price targets differ widely, showing uncertainty about how quickly semiconductors will integrate and future profits.
