For companies, spreading their wings into international markets can be a game-changer. Exporting products overseas doesn’t just widen their market reach; it opens doors to exciting new opportunities and growth prospects. In this context, CG Power & Industrial Solutions, a notable presence in the electrical industry, is embarking on an ambitious journey to strengthen its export capabilities, a move that could have a significant impact on its share price.
As a major player in the power and industrial solutions sector, CG Power & Industrial Solutions has been a substantial contributor to the energy sector. It has, over time, established itself as a leader in the Low Tension (LT) motors segment, capturing an impressive 35% market share.
What’s particularly intriguing is their strategic focus on boosting their export capabilities, combined with a strong track record of growth in the power industry, creates an enticing storyline that investors, stakeholders, and industry watchers are closely following. What might lie ahead in terms of CG Power & Industrial Solutions’ share price? To find out, let’s delve into the critical factors, industry trends, and market dynamics that could shape the future of this electrical powerhouse.
About CG Power & Industrial Solution
CG Power & Industrial Solutions, a proud member of the esteemed Murugappa Group, boasts an impressive 85-year history. The company is dedicated to the responsible management and application of efficient and sustainable electrical energy, serving a global clientele that includes utilities, industries, and consumers. This commitment is reflected in two core business segments: Power Systems and Industrial Systems.
Within these segments, CG Power & Industrial Solutions excels in two distinct business divisions. The Industrial Systems division specializes in Motors & Drives and Railways, while the Power Systems division is renowned for its top-tier Transformers, Switchgears, and related products.
The company’s operations are genuinely global, with 90% of its presence firmly established in the domestic market, while the remaining 10% is dedicated to exports. CG Power & Industrial Solutions operates from 17 state-of-the-art manufacturing facilities strategically positioned across India, including locations in Goa, Madhya Pradesh (Bhopal, Indore, and Gwalior), and Maharashtra (Ahmednagar, Nashik, and Aurangabad).
CG Power & Industrial Solutions maintains a strong global presence, reaching countries like Burkina Faso, Cameron, Congo, Greece, Kenya, Paraguay, Philippines, Suriname, Tunisia, UAE, and Uganda. In FY24, the company’s strategic focus revolves around increasing export contributions from 5% to 20% over the next 4-5 years.
CG Power & Industrial Solution Q1 FY 2024 Key Points And Summary:
- Strong Q1 FY ’24: CG Power & Industrial Solutions recorded a robust first quarter in FY ’24, with all business segments growing in double digits year-on-year, and profit before tax increased by 55%.
- Consolidated Growth: Consolidated results showed a 14% growth in aggregate sales and a 14% increase in profit before tax year-on-year.
- Robust Order Book: The order book as of June 30, 2023, amounted to INR 4,909 crores, indicating a healthy pipeline of future projects.
- Improved Margins: Higher margins year-on-year were achieved due to volume growth, favorable product mix, softening input costs, and procurement efficiencies.
- Healthy Cash Position: CG Power & Industrial Solutions maintained a strong cash position of INR 650 crores as of June 2023.
- Anticipated Sale Proceeds: Sale proceeds from QEI LLC are expected in Q2, providing additional financial strength for future endeavors.
Recent News
- Murugappa Group’s CG Power Achieves Debt-Free Status, Rebounding Strongly After 2020 Acquisition. (17 May)
- CG Power & Industrial Solutions to Invest Rs 500 Crore in Capacity Expansion for Future Growth (5 Aug)
| When | Maximum Price | Minimum Price |
| November 2023 | ₹403.53 | ₹366.84 |
| December 2023 | ₹416.85 | ₹378.95 |
The anticipated maximum price for CG Power & Industrial Solutions in 2023 is expected to reach ₹416.85, and this peak is likely to occur in December of the same year. In contrast, the expected minimum price for the year is projected to be ₹366.84, with this low point foreseen in November 2023.
These price fluctuations indicate the potential range of values that investors can anticipate throughout the course of 2023.
| When | Maximum Price | Minimum Price |
| January 2024 | ₹425.35 | ₹369.87 |
| February 2024 | ₹434.03 | ₹377.42 |
| March 2024 | ₹442.89 | ₹385.12 |
| April 2024 | ₹429.99 | ₹373.91 |
| May 2024 | ₹423.64 | ₹368.38 |
| June 2024 | ₹438.89 | ₹381.64 |
| July 2024 | ₹434.50 | ₹377.83 |
| August 2024 | ₹451.88 | ₹392.94 |
| September 2024 | ₹469.95 | ₹408.66 |
| October 2024 | ₹460.74 | ₹400.64 |
| November 2024 | ₹474.56 | ₹412.66 |
| December 2024 | ₹486.43 | ₹422.98 |
Starting the year in January 2024, CG Power & Industrial Solutions’ share price is poised to begin at ₹425.35, marking the highest value at the year’s outset. As the year unfolds, a gradual decline in the share price is anticipated, with the lowest point expected in September 2024, reaching ₹369.87.
Nevertheless, following this descent, the share price is foreseen to embark on a consistent upward journey. By December 2024, the expected maximum share price for the year stands at ₹486.43, signifying a substantial growth from the September low. This positive trend hints at a potential recovery and buoyant market sentiment.
This pattern underscores the cyclicality inherent in stock markets, wherein share prices can oscillate due to factors like market sentiment, economic conditions, and CG Power & Industrial Solutions’s performance. These projected price fluctuations provide investors with valuable insights into potential moments for buying and selling while emphasizing the market’s inherent volatility.
| When | Maximum Price | Minimum Price |
| January 2025 | ₹496.15 | ₹381.66 |
| February 2025 | ₹508.88 | ₹391.44 |
| March 2025 | ₹528.72 | ₹406.71 |
| April 2025 | ₹518.36 | ₹398.73 |
| May 2025 | ₹503.26 | ₹387.12 |
| June 2025 | ₹525.90 | ₹404.54 |
| July 2025 | ₹515.59 | ₹396.61 |
| August 2025 | ₹531.54 | ₹408.88 |
| September 2025 | ₹550.14 | ₹423.19 |
| October 2025 | ₹564.45 | ₹434.19 |
| November 2025 | ₹578.56 | ₹445.04 |
| December 2025 | ₹593.02 | ₹456.17 |
Throughout 2025, the financial market for CG Power & Industrial Solutions is expected to witness a notable price volatility. The share price exhibits a rollercoaster of ups and downs, mirroring the ever-changing market dynamics.
In the opening month of January 2025, the maximum share price is anticipated to reach ₹496.15, while the minimum hovers at ₹381.66, indicating a substantial price range. As the year unfolds, this trend persists, with both the highest and lowest values experiencing fluctuations.
The lowest point for share prices is expected in the initial months, specifically in January and February. However, as the year progresses, the share price gradually ascends in the subsequent months. By December, the expected maximum price surges to ₹593.02, signifying substantial growth from the lowest point. This consistent rise in the maximum share price suggests an overall positive market sentiment and investor confidence in the company.
Nonetheless, the continuous price fluctuations throughout the year underscore the presence of market volatility. Investors are advised to remain vigilant and consider these fluctuations when making investment decisions. While the market presents opportunities for gains, it also carries inherent risk due to its dynamic and ever-changing nature.
| Year | Maximum Price | Minimum Price |
| 2026 | ₹622.67 | ₹435.87 |
| 2027 | ₹684.94 | ₹479.46 |
| 2028 | ₹958.92 | ₹479.46 |
| 2029 | ₹830.23 | ₹415.11 |
| 2030 | ₹1,079.30 | ₹755.51 |
In 2026, the maximum share price is expected to reach ₹622.67, while the minimum stands at ₹435.87, indicating a considerable price range. As the years progress, the share price continues to demonstrate a consistent upward trajectory.
By 2030, the maximum share price is anticipated to soar to ₹1,079.30, a substantial increase from the preceding years. This remarkable growth suggests that investors have shown a strong interest in the company, potentially driven by factors like positive financial performance, market sentiment, and growth prospects.
Conversely, the minimum share price, while exhibiting fluctuations, also follows an upward trend. In 2030, the minimum share price is expected to be ₹755.51, which is significantly higher than the minimum price in the earlier years. This suggests that even during periods of lower price points, the share price remains relatively robust.
Overall, the share price data from 2026 to 2030 points towards a positive outlook for the company, reflecting investor confidence and the potential for substantial returns. However, it’s important to recognize that these projections are based on expectations and historical data, and real market conditions may vary. Investors should conduct thorough research and consider all relevant factors before making investment decisions.
CG Power & Industrial Solutions Financial Condition (Last 5 Years)
| Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | |
| Sales + (Crores Rs.) |
7,998 | 5,110 | 2,964 | 5,484 | 6,973 |
| Expenses + (Crores Rs.) |
7,699 | 5,079 | 2,848 | 4,837 | 5,967 |
| Operating Profit (Crores Rs.) |
299 | 31 | 116 | 647 | 1,005 |
| OPM % | 4% | 1% | 4% | 12% | 14% |
| Other Income + (Crores Rs.) |
-116 | -861 | 1,655 | 569 | 286 |
| Interest (Crores Rs.) |
432 | 365 | 206 | 82 | 28 |
| Depreciation (Crores Rs.) |
225 | 211 | 138 | 99 | 94 |
| Profit before tax (Crores Rs.) |
-475 | -1,407 | 1,427 | 1,035 | 1,169 |
| Tax % | -7% | 5% | 10% | 12% | 18% |
| Net Profit + (Crores Rs.) |
-507 | -1,331 | 1,280 | 913 | 963 |
| EPS in Rs | -8.03 | -21.12 | 9.68 | 6.33 | 6.3 |
| Dividend Payout % | 0% | 0% | 0% | 0% | 24% |
- Sales and Expenses: CG Power & Industrial Solutions’ sales and expenses have shown significant fluctuations during the five-year period. Sales increased from 7,998 in March 2019 to a peak of 6,973 in March 2023. However, expenses also decreased, leading to fluctuations in operating profit.
- Operating Profit Margin (OPM): The OPM percentage reflects the efficiency of the company’s operations. The OPM started at 4% in March 2019, dipped to 1% in March 2020, and then gradually improved, reaching 14% by March 2023. This indicates that the company’s operational efficiency has increased significantly over time.
- Other Income: Other income experienced significant variations during this period. In March 2021, the company recorded a substantial income of 1,655, contributing positively to overall profitability. However, it fluctuated over the years.
- Interest and Depreciation: Both interest and depreciation expenses generally decreased over the years. Lower interest and depreciation costs are favorable, as they can positively impact the CG Power & Industrial Solutions’ bottom line.
- Tax Percentage: The tax percentage increased from -7% in March 2019 (indicating a tax benefit) to 18% in March 2023, suggesting that tax obligations increased with rising profits.
- Net Profit and EPS: Net profit showed a remarkable turnaround from negative values to positive ones. The earnings per share for CG Power & Industrial Solutions (EPS) also improved from -8.03 in March 2019 to 6.3 in March 2023.
- Dividend Payout: CG Power & Industrial Solutions also had a dividend payout of 0% for the first four years but allocated 24% of profits to dividends in March 2023, indicating a shift towards rewarding shareholders.
In summary, CG Power & Industrial Solutions experienced a significant turnaround in its financial performance, transitioning from losses to profits and achieving improved operational efficiency and profitability over the five-year period. However, fluctuations in other income and tax rates demonstrate that it still faces certain uncertainties and challenges in its financial operations.
FAQs
What Is the Current Market Value of CG Power & Industrial Solutions?
The current market capitalization (Market Cap) of CG Power & Industrial Solutions stands at ₹ 59,440 Crores.
The current (1st November ) share price of CG Power & Industrial Solutions is ₹390.
What Is the Compounded Profit Growth of CG Power & Industrial Solutions Trend Over the Years?
The compounded profit growth trend for CG Power & Industrial Solutions over various periods is as follows:
- Over the last 10 years, the compounded profit growth was 20%.
- Over the last 5 years, it increased to 28%.
- Over the last 3 years, the growth trend surged significantly to 61%.
- The trailing twelve months (TTM) also show a growth rate of 61%.
Should One Invest In CG Power & Industrial Solutions?
Firstly, CG Power has been on a journey of financial improvement over the past five years. The company has successfully managed to reduce its debts, a promising sign for investors as it indicates a healthier balance sheet and reduced financial risk. Notably, the company has also achieved robust profit growth, with a compounded annual growth rate (CAGR) of 28.4% over this period. This suggests a company that’s been working diligently to increase its profitability, which is undoubtedly a good sign for investors.
Furthermore, CG Power’s return on capital employed (ROCE) and return on equity (ROE) have been consistently strong, standing at 61.6% and 66.0%, respectively. These figures are indicative of a company that efficiently utilizes its resources and provides a decent return to its shareholders.
However, it’s essential to consider the cons as well. The company’s stock is currently trading at a relatively high price-to-earnings (P/E) ratio of 72.4, which is considerably above the industry average. This may suggest that the stock is overvalued, and potential investors should be cautious about this high valuation.
Another concern is the CG Power & Industrial Solution’s sales growth or rather the lack of it. CG Power has struggled to achieve positive sales growth over the past five years, with a decline of -2.79%. While the company’s profitability has improved, its ability to increase revenue has been stagnant, which can be seen as a red flag for some investors.
It’s also worth noting that a significant portion of CG Power’s earnings come from other income sources, which totaled Rs. 300 Cr. While it might have contributed to profits recently, there’s a question mark about whether this other income is sustainable over the long term. Investors should be cautious about relying too heavily on such sources of income.
Additionally, the stock price has shown considerable volatility over the past five years. The compound annual growth rate (CAGR) in stock price was 158% over the last three years, which may indicate higher market risk associated with CG Power.
In conclusion, the decision to invest in CG Power & Industrial Solutions should be made thoughtfully. The company has displayed financial resilience and improved profitability, but the high valuation, sales challenges, and reliance on non-operational income should be considered. Investors should conduct thorough research and factor in their risk tolerance and long-term investment objectives before making a decision. Understanding the company’s future strategies and assessing their viability will be crucial in making an informed investment choice.
What did we learn?
- 1 About CG Power & Industrial Solution
- 2 CG Power & Industrial Solution Q1 FY 2024 Key Points And Summary:
- 3 Recent News
- 4 CG Power & Industrial Solutions Share Price Target 2023 To 2030
- 5 CG Power & Industrial Solutions Financial Condition (Last 5 Years)
- 6 FAQs
- 6.1 What Is the Current Market Value of CG Power & Industrial Solutions?
- 6.2 What Is the Current Share Price of CG Power & Industrial Solutions?
- 6.3 What Is the Compounded Profit Growth of CG Power & Industrial Solutions Trend Over the Years?
- 6.4 What Is The Target Share Price For CG Power & Industrial Solutions By 2025?
- 6.5 What Is The Target Share Price For CG Power & Industrial Solutions By 2030?
- 7 Should One Invest In CG Power & Industrial Solutions?
