CG Power & Industrial Solutions Ltd: A Multibagger Stock with Over 1200 Percent Returns; Is it Worth Considering?

CG Power & Industrial Solutions Ltd Logo

CG Power & Industrial Solutions Ltd, an 85+ year old Murugappa Group Company, has been making waves in the stock market with an astounding growth rate of over 1200% in the past three years. The company operates in two crucial business divisions – Industrial Systems (catering to Motors & Drives, Railways) and Power Systems (used in Transformers, Switchgears & other allied products). As a market leader and volume player in the Motors business, CG Power has recently seen its shares reaching record highs as it seeks approval to set up a semiconductor assembly unit. This article explores the incredible journey of CG Power’s stock growth and the exciting prospects that lie ahead.

Weekly Char of the Stocks

The weekly chart of CG Power’s stock reveals a remarkable upward trend since 2020, showcasing the company’s robust fundamentals.

In 2020, the stock was valued at around 30 rupees per share, and as of 2023, it has surged to approximately 450 rupees per share, translating to an extraordinary return of over 1200% in just three years.

Second Quarter Results FY 2023-24

In the second quarter of the fiscal year 2023-24, CG Power posted a commendable 37% growth in consolidated net profit, reaching Rs 244 crore. This significant increase can be attributed to higher revenues, as indicated by the company’s profit of Rs 178 crore in the same quarter of the previous year. Total sales soared to Rs 2,002 crore, a substantial leap from Rs 1,675 crore in the corresponding period a year ago. The Board of Directors also approved proposals to expand manufacturing capacities in key areas such as switchgears, power transformers, and HT Motors, showcasing the company’s commitment to continued growth.

Diving into Semiconductor Territory

In a groundbreaking move, CG Power has filed an application with the Ministry of Electronics and Information Technology (MeitY) seeking approval to set up an OSAT (Assembly, Testing, Marking, and Packaging) facility for semiconductors. The estimated investment for this ambitious project over five years is $791 million (approximately ₹6,592 crore), expected to be funded through a combination of subsidy, JV Partners equity contribution, and debt. The company aims to establish the OSAT unit as a Joint Venture in partnership with technology providers and anchor customers.

This strategic move aligns with the global surge in demand for semiconductors and positions CG Power as a key player in this high-growth sector. As the company ventures into semiconductor technology, investors are presented with an exciting opportunity to be part of a forward-looking enterprise with a rich history of success.

CG Power & Industrial Solutions Ltd, propelled by key success factors, is on a remarkable growth journey, making it a compelling investment opportunity. However, it is strongly advised that astute investors conduct comprehensive research and align their investment decisions with their specific financial goals to ensure informed and prudent choices.

Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)

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