CG Power and Industrial Solutions Ltd - 48.25% annual EPS increase
An 86-year-old engineering conglomerate and a leader in the Electrical Engineering Industry.
Company name - CG Power and Industrial Solutions Ltd
Last closing price(NSE:CGPOWER) - ₹773.95(as on 23-Sep-2024)
Estimated reading time - 3 minutes
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Executive Summary
CG Power & Industrial Solutions is a global enterprise providing end-to-end solutions to utilities, industries and consumers for the management and application of efficient and sustainable electrical energy.
The company had an unexecuted order book of ₹7,054 crores(up 44% YoY) as of June 30, 2024.
The annual EPS increased by 48.25%.
Stock price chart
Detailed analysis
About the company
CG Power & Industrial Solutions is a global enterprise providing end-to-end solutions to utilities, industries and consumers for the management and application of efficient and sustainable electrical energy.
CG has two business lines—Industrial Systems and Power Systems.
It manufactures Traction Motors, Propulsion Systems, Signalling Relays etc., for the Indian Railways, and wide range of Induction Motors, Drives, Transformers, Switchgears, and other allied products for the Industrial and Power sectors.
Recently, the Company also made a foray into the business of Consumer Appliances such as Fans, Pumps, and Water Heaters.
Future prospects
What is the company’s plan to maintain earnings growth in future?
Unexecuted order book as of June 30, 2024, was ₹7,054 crores, up 44% YoY.
Management anticipates a 40% growth in railway business based on awarded tenders.
Current capacity utilization at 85%-90%, with expansions planned for both power and switchgear segments by Q3 FY '25.
Potential risks which can hamper the future growth
Competitive pricing pressures in the Industrial Systems segment impacting margins.
Financial analysis
Overview
The company has a strong ROCE of 46.6%, and debt-to-equity ratio is 0.01.
The promoter holding is 58.1% and the pledged percentage is 0%.
Quarterly results
Growth in key metrics in the latest quarter Q1 - 2025 compared to the last year’s same quarter -
The company has been reporting consistent double digit sales growth with 18.86% growth in the latest quarter. The operating margin also increased by 7.14%.
The net profit increased by 18.1% and EPS increased by 18.8%.
Annual results
Growth in key metrics in the last financial year 2024 compared to the previous financial year -
The sales increased by 15.4%. and the EPS increased by 48.25%.
The net interest payment(debt) reduced by 60%.
Peer comparison
The company’s current market cap is 43% lower compared to the nearest peer ABB, but -
the total profit in the previous 12 months is only 2% less.
The sales is also 36% less.
This shows a potential for company’s market cap to grow in the future if it is able to maintain it’s growth rate.
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Credits : Financial data source - screener.in