CG Power and Industrial Solutions Limited

CG Power reported a robust Q2 FY26, with consolidated sales growing 21% year-over-year to INR 2,923 crores. Consolidated Profit After Tax (PAT) increased by 30% year-over-year to INR 284 crores. The company also achieved significant margin improvement, with PBT margins expanding by 90 basis points sequentially and 230 basis points year-over-year, primarily driven by the strong performance of the Power Systems segment.

The quarter saw a strong consolidated order intake of INR 4,772 crores, representing a 45% year-over-year growth. This robust inflow contributed to a significant strengthening of the unexecuted order backlog, which stood at INR 14,953 crores as of September 30, 2025, an 88% increase year-over-year. This backlog provides multi-quarter visibility, with execution timelines varying from 6 to 24 months depending on the product type.

The Power Systems segment was a key growth driver, with sales rising sharply by 48% year-over-year to INR 1,254 crores and PBIT expanding by 310 basis points to INR 260 crores (20.73% margin). In contrast, the Industrial segment experienced a 2% year-over-year sales decline to INR 1,395 crores, with PBIT at INR 135 crores (9.7% margin). This was attributed to project deferments in the Railway business and challenges in passing on commodity price increases.

CG Power is actively expanding its manufacturing capabilities. The Transformer division successfully increased its capacity from 15,000 MVA to 40,000 MVA on October 1st, with plans for a new plant to further expand to 45,000 MVA. Additionally, the Board approved a greenfield expansion for the Switchgear business, entailing an investment of INR 748 crores (net of taxes), to cater to anticipated demand growth in domestic and export markets for medium voltage and EHV products.

The company's semiconductor ventures are progressing, with CG Semi Private Limited opening its G1 factory near Ahmedabad, capable of producing 0.5 million units per day. The larger G2 plant, currently under construction, is expected to be operational by late 2026 or early 2027, aiming for a capacity of 14.5 million chips per day. Axiro, the semiconductor design subsidiary, is projected to achieve approximately $50 million (INR 450 crores) in revenue for FY26 and is currently operating at a breakeven level.

Exports remain a strategic priority, with H1 exports showing a 20-25% year-over-year growth in absolute terms. The company is upgrading manufacturing capabilities to meet global standards and expanding its market presence across Southeast Asia, Europe, Africa, and the U.S. For the new transformer capacity, CG Power plans to derive 35-40% of its revenues from exports, significantly increasing from the current 10-20% export mix.

CG Power is committed to technological advancement, with plans to introduce a complete 'Make in India' solution for its 400 kV GIS in the next fiscal year. The company is also actively exploring both organic and inorganic avenues for STATCOMs technology, aiming to enhance its product portfolio and maintain a competitive edge in the power electronics space.