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Informist, Saturday, Jan. 24, 2026

 

By Astha Oriel

 

MUMBAI – CG Power and Industrial Solutions Ltd., is expected to post double-digit year-on-year growth in its consolidated top line and bottom line for the December quarter, according to brokerages tracking the company. The increase in net profit is likely due to healthy execution of order book, particularly in the power systems segment in which the transmission and distribution sub-segment will be a key growth driver, whereas deferred railway supplies are expected to boost the company's net revenue. The operating margin, however, is likely to decline marginally due to higher copper prices and intense competition.

 

CG Power is expected to post a net profit of INR 3.16 billion for the December quarter, up more than 31% on year and over 10% on quarter, according to the average of the estimates of four brokerages. The net profit was INR 2.40 billion in the year-ago quarter. Estimates for net profit range from a high of INR 3.34 billion by Nomura Equity Research to a low of INR 2.86 billion by Nuvama Wealth Management Ltd. This is likely to be the fourth consecutive quarter of an increase in the company's net profit.

 

"With increasing market share in LT (low-tension) motors segment via railways and right product-mix (transformers, switchgears etc.), we believe CGPIL can showcase execution led earnings growth going ahead," Nuvama said. The company's current split between low-tension and high-tension motors was 80:20, the management had said in the September earnings call.

 

The company's net revenue is expected to be INR 32.15 billion, up nearly 28% on year and 10% on quarter, according to the average of the estimates. The company's net revenue was INR 25.15 billion in the year-ago quarter. The highest estimate for net revenue is INR 33.60 billion by Kotak Securities Ltd., whereas the lowest estimate is INR 30.64 billion by Nuvama.

 

Nomura expects CG Power to record order inflows of INR 43.5 billion for the December quarter. The company's order inflow was INR 43.90 billion for the year-ago quarter. Of this, the power segment's order inflow was INR 17.59 billion, whereas the industrial segment's order inflow was INR 18.77 billion.

 

Nuvama estimates the company's order book at INR 150 billion at the end of December. The order book was at INR 97.06 billion a year ago.

 

The company's earnings before interest, tax, depreciation, and amortisation are expected to be INR 4.26 billion, up nearly 17% on year but down nearly 4% on quarter, according to the average of the estimates. The company's EBITDA was INR 3.65 billion in the year-ago quarter. The highest estimate is INR 4.58 billion from Kotak Securities, whereas the lowest estimate is INR 3.94 billion by Nuvama.

 

Kotak Securities, Nomura, and Nuvama expect the power ancillary's operating margin to be between 12.9% and 13.6% for the December quarter. The highest estimate for the EBITDA margin is 13.6% by Kotak Securities, whereas the lowest estimate is 12.9% by Nuvama. The company's EBITDA margin was 14.5% in the year-ago quarter. The power segment's EBITDA margin was 18.6%, whereas the industrial segment's operating margin was 13.2%.

 

Nomura expects the EBIT margin for the power systems unit to expand 297 basis points on year, while the EBIT margin for industrial systems is expected to contract by 115 bps on year on account of higher copper prices and intense competition. Copper prices have risen more than 19% on year in the December quarter, according to Nomura. Kotak Securities expects a lower EBIT margin for the power systems business as the commissioning of the new capacity would increase depreciation by around 40 bps.

 

Analysts will track the management's commentary on inorganic opportunities, the outlook for demand for short cycle products, and an update on capital expenditure plans of the outsourced semiconductor assembly and testing business.

 

The company will announce its December quarter earnings on Tuesday. Shares of the company closed at INR 549.10 apiece on the National Stock Exchange on Friday, down 4.4%. The shares have fallen more than 25% since the company reported its September quarter earnings.

 

All three brokerage reports on the company available with Informist have a 'buy' rating on the stock with an average target price of INR 867 per share. This is nearly 37% higher than the current market price.

 

CG Power, formerly known as Crompton Greaves, has two business lines – industrial systems and power systems. The company manufactures traction motors, propulsion systems, and signalling relays for the Indian railways, and a wide range of induction motors, drives, transformers, switchgears, and other allied products for the industrial and power sectors.

 

Following are the December quarter earnings estimates for CG Power and Industrial Systems from four brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net sales	Net profit	EBITDA
Nomura Equity Research	32.76	3.34	4.35
Kotak Securities Ltd	33.60	3.26	4.58
Emkay Global Financial Services Ltd	31.58	3.18	4.17
Nuvama Wealth Management Ltd	30.64	2.86	3.94
Average	32.15	3.16	4.26

 

End

 

Edited by Avishek Dutta

 

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