Earnings Outlook
CG Power Q2 PAT seen up on strong EBIDTA, sales growth
This story was originally published at 10:37 IST on 27 October 2025
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By Rajesh Gajra
NEW DELHI - CG Power and Industrial Solutions Ltd. is likely to report strong revenue growth for the September quarter on the back of robust demand and order execution in its power systems segment, and a 5% price increase taken in the motors business, in which it is the market leader in low-tension motors. The motors business is a part of the industrial systems segment of the company.
CG Power's operating profit and margins are expected to rise due to robust demand and strong revenue growth, and the bottom line growth will largely track operating profit growth. The company is seen posting a rise of 42% on year and 16% on quarter in its consolidated net profit at INR 3.1 billion, according to the average of estimates by four brokerages. These estimates range from a low of INR 3 billion by Emkay Global Financial Services to a high of INR 3.3 billion by Nomura Equity Research.
CG Power is likely to report consolidated revenue of INR 31 billion for the September quarter, up 28% on year and 7.6% on quarter. The lowest estimate for revenue is INR 30.3 billion by Nuvama Wealth Management and the highest estimate is INR 32 billion by Nomura.
The company operates primarily in two key segments - industrial systems, and power systems. In 2024-25 (Apr-Dec), the industrial systems segment accounted for 64.3% of the company's revenue and the power systems segment accounted for 35.4%, data from the company's latest annual report showed.
CG Power is expected to post strong on-year growth in its power systems segment for the September quarter with the transmission and distribution sub-segment being the key growth driver, Kotak Securities said in a report. The company would benefit from robust demand and strong order inflows in industrial systems, particularly from Indian Railways, it said. The company is seen showcasing execution-led earnings growth with an increased market share in low-tension motors business via railways and right product-mix comprising transformers, switchgears, and other products, Nuvama said.
The company is expected to report earnings before interest, tax, depreciation, and amortisation of INR 4.3 billion for the September quarter. Better operating leverage will help CG Power expand its EBITDA margin by 140 basis points on year, according to Nomura.
"We expect 190 bps (basis points) yoy (year on year) higher EBITDA margin, reflecting benefit of recent price uptick in the key motors business and broadly stable qoq (quarter on quarter) margin in power systems," Kotak Securities said. It expects the company to post 90 basis points increase on quarter in EBITA margin "on lower semiconductor losses and better industrial margin (pricing having bottomed out in the motors business)."
The company had raised the prices of its motors business products on Jul. 1. Even though the company had said that the effect of the price hike would take a minimum of two-three months to show up and would not happen immediately, analysts expect CG Power to reap the benefit of this price hike increase from the September quarter itself.
The company will detail its September quarter earnings on Wednesday. Investors will watch for management commentary on the outlook for demand for short cycle products, inorganic opportunities, and an update on capital expenditure plans for its semiconductor business, Nomura said.
At 1009, shares of the company were up 0.4% at INR 727 on the National Stock Exchange. The stock is up around 6% since the June quarter earnings announcement on Jul. 24. All five brokerage reports on the company available with Informist have a 'buy' call on the stock with an average target price of INR 767.
In the trailing quarter, the company had reported a 12% on-year rise in its consolidated net profit at INR 2.7 billion, while the consolidated revenue from operations had jumped 29% on year to INR 28.8 billion.
Following are the September quarter earnings estimates for CG Power from four broking firms in the descending order of estimate of net profit:
Broking firm | Net sales (in INR million) | Net profit (in INR million) | EBITDA (in INR million) | |
Nomura Equity Research | 31,959 | 3,320 | 4,351 | |
Nuvama Wealth Management Ltd. | 30,247 | 3,112 | 4,265 | |
Kotak Securities Ltd. | 30,582 | 3,052 | 4,323 | |
Emkay Global Financial Services Ltd. | 31,088 | 3,019 | 4,142 | |
Average | 30,969 | 3,126 | 4,270 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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