CG Power and Industrial Solutions Ltd. share price target

*over or under performance to benchmark index CG Power and Industrial Solutions Ltd manufactures and distributes electrical equipment, such as transformers, reactors and control equipment, as well as industrial motors and pumps and communication systems. CG Power's consolidated revenue for Q4FY25 grew 25.6% YoY to Rs. 2,753cr, led...

We maintain BUY on CG Power & Industrial Solutions (CGPower) with TP of Rs765 (unchanged). Q4FY25 results were broadly mixed, with revenue in line with estimates and our PAT seeing a marginal miss. Consolidated revenue/EBITDA/PAT grew 26/28/23% YoY to Rs27.5/3.6/2.9bn, respectively.

The recovery in the industrial segment, where CG POWER is the market leader with >35% market share in Motors.

Sales grew by 13% YoY to INR13.9b (est. of INR13.1b), supported by above estimated performance in the industrial systems segment. Power systems sales declined 10% YoY to INR6.2b, whereas industrial systems sales registered robust growth of 42% YoY to INR7.6b. Industrial systems 14 November 2018 performance was supported by healthy growth in the railway and motors segment. Standalone EBIDTA at INR1.3b (+65% YoY) and margin at 9.2% was above our estimate of 7.8%. Adjusted PAT of INR633m (+108% YoY) was ahead of our estimate of INR568m. On a consolidated basis, gross debt stood at INR28b, debt from continued business stood at INR22b, and debt from discontinued business stood at INR6b. Gross debt on sequential basis has increased by INR400m on restated basis (on reported basis gross debt has seen an increase of INR2.

Consolidated revenue of CG Power & Industrial Solutions (CG Power) grew by 11.3% YoY to Rs14.9bn in 1QFY19 led by robust 15% YoY growth in Industrial Systems. PAT from continuing operations stood at Rs45mn vs. Rs423mn loss in 1QFY18, while its loss including discontinued operations remained flat at Rs855mn. Looking ahead, we expect CG Power's consolidated earnings to recover on low base and exit from loss-making assets in Hungary and Belgium. We...

CG Power reported an exceptional loss at parent level in Q4FY18 led by continued loss of Rs1.1bn at Hungary unit (sale spilled over to H1FY19 owing to General Elections), Rs1.6bn of inventory write-off in Power System Transformers segment in Latin America and inventory write down in domestic Power System book value and write-off of Rs1.5bn in Engineering Projects business. As per the Management, Hungary divestment is on track despite delay by a quarter due to General Elections. The Company expects the deal to sail through by Jun'18 and a quarterly loss...

Sales rose 22% YoY to INR14.3b (est. of INR14.1b), driven by 28% LTL growth in the industrial segment and 16% LTL growth in the power segment. EBIDTA increased 42% YoY to INR1.2b, with the margin of 8.1% ahead of our estimate of 7.5%. Adj. PAT of INR0.63b (+31% YoY) was ahead of our estimate of INR0.43b, led by 31 May 2018 higher other income (INR484m v/s est. Extraordinaries booked during the quarter stood at INR4b due to (a) INR1b of loss funding for Hungary biz, (b) INR1.7b of inventory write-down relating to the transformer business and (c) INR1.

CG Power & Industrial Solutions (CG Power) has reported a stable set of numbers for 3QFY18. While its reported consolidated revenue grew by 7.3% YoY to Rs15.1bn, after adjusting for GSTrelated impact, it posted 14.9% YoY growth (like-to-like basis) vs. Rs13.1bn in 3QFY17. Consolidated net profit from continuing operations (after adjusting for exceptional item of Rs534mn) dipped by 37.8% YoY to Rs334mn, while consolidated net loss (including discontinued operations) declined to Rs282mn from Rs4,305mn in 2QFY18. Industrial segment which contributed 42.9% to its total revenue grew by 12.6% YoY to Rs6.5bn due to improved execution of orders, while Power system which contributed 56.8% to its total revenue grew by 3.4% YoY to Rs8.6bn. Looking ahead, we expect CG Power's consolidated earnings to recover on low base and exit from lossmaking assets in Hungary and Belgium. Rolling over our estimates to FY20E, we maintain our...

Sales rose 11% YoY to INR11.8b (below estimate of INR12.7b), driven by Industrial segment growth of 11% YoY (like-to-like growth of 20% YoY). Power systems segment sales declined 6% YoY on a reported basis (muted like-to-like growth of 3% YoY). EBIDTA grew 4% YoY to INR871m (ahead of our estimate of INR683m), with the margin of 7.4% (-50bp YoY) ahead of our estimate of 5.4%. Adj. PAT of INR0.5b exceeded our estimate of INR0.3b due to lower tax (INR10m v/s our estimate of INR73m) and higher other income (INR454m v/s our estimate of INR250m).

Net Loss Widens; All Eyes on Sale of Overseas Assets CG Power & Industrial Solutions (CG Power) continued to report a dismal performance in 2QFY18. Its consolidated net loss including discontinued operations stood at Rs4305mn. Excluding discontinued operation, CG Power reported Rs378mn loss vs. Rs 220mn profit in 2QFY17 owing to lower margin on the back of higher commodity prices. Notably, the Company couldn't undertake any price hike especially amid a weak demand environment due to GST transition. Its consolidated revenue including Indonesian subsidiary grew by a strong 18% YoY to Rs15.6bn in 2QFY18, driven by a recovery of lost sales in Indonesia (US$20mn) due to...