Shares of CG Power and Industrial Solutions experienced a 4 percent increase on Thursday following the company’s report of a significant rise in quarterly profit and an optimistic growth outlook. The stock closed at ₹859.10, marking a 3.64 percent rise after reaching a 52-week high of ₹872.35 from the previous close of ₹828.90.
The Murugappa Group company announced a 32 percent year-on-year increase in consolidated net profit, amounting to ₹363 crore for the quarter that ended in March 2026 (Q4 FY26). This growth was driven by robust demand across its power systems and industrial divisions.
Brokerage firm Motilal Oswal reaffirmed a ‘buy’ rating for the stock, assigning a target price of ₹940, citing strong growth prospects in various segments and an improved margin outlook. They noted a marginal upward revision of 6 percent in earnings estimates for FY27 and 5 percent for FY28, reflecting better margins in the power systems sector along with enhanced balance sheet metrics.
Motilal Oswal projects an 11 percent compound annual growth rate (CAGR) in overall order inflows between FY26 and FY28, fueled by strong demand for transformers and switchgear in both domestic and international markets. The industrial segment is expected to support order inflows due to expansions in motors and railway-related businesses.
The brokerage anticipates a revenue CAGR of 25 percent from FY26 to FY28, with EBIT margins projected at 13.9 percent and 15.1 percent for FY27 and FY28, respectively, leading to an estimated profit-after-tax (PAT) CAGR of 32 percent over the same timeframe. The stock is currently trading at 81.3 times FY27 estimated earnings and 60.7 times FY28 estimated earnings. Motilal Oswal stated it has updated its sum-of-the-parts valuation to June 2028 while maintaining its buy recommendation.
They assigned a valuation multiple of 58 times to the power systems business, reflecting expected capacity expansion and robust sector demand. The industrial systems business was valued at a 10 percent discount to ABB. Additionally, the OSAT (Outsourced Semiconductor Assembly and Test) business was valued using a discounted cash flow method to account for anticipated benefits starting in FY28.
However, the brokerage highlighted risks such as a potential slowdown in transmission and distribution capital expenditure, rising commodity prices, weak demand for motors, and limited execution experience in OSAT.
InCred Equities also expressed confidence that CG Power is positioned for significant growth, primarily due to its core power business and export opportunities. The firm noted the company’s strategic entry into emerging high-growth segments like OSAT and Kavach, alongside potential acquisitions to enhance its portfolio. They maintained an ‘add’ rating on the stock and increased their target price from ₹900 to ₹1,000, while flagging risks including heightened competitive pressures, supply chain disruptions, declining profitability in the railway sector, and a slower-than-expected rebound in private sector capital expenditure.
Published on May 7, 2026.
