Detailed Narrative
Strong Q4 and FY26 Performance Driven by Execution
CG Power and Industrial Solutions Limited delivered a robust Q4 FY26, with standalone sales growing 22% YoY to INR3,129 crores. PBT (excluding exceptional item📎s) for the quarter increased 43% YoY, accompanied by a 260 basis points margin expansion. For the full fiscal year, standalone sales reached INR11,331 crores, up 21% YoY, and PBT (excluding exceptional item📎s) grew 39% YoY with a 143 basis points margin expansion, marking a record performance for the company.
Record Order Book and Revenue Visibility
The company's consolidated unexecuted order backlog surged 61% YoY to INR17,107 crores as of March 31, 2026, providing strong revenue visibility for FY27. Consolidated order intake for Q4 FY26 was INR5,335 crores, a 39% YoY increase, while full-year consolidated order intake stood at INR19,616 crores, up 33% YoY. This strong order flow is attributed to penetration into new verticals and markets, particularly in Power Systems and Motors.
Power Systems Outperformance and Strategic Wins
The Power Systems segment was a key growth driver, with Q4 sales soaring 50% YoY to INR1,487 crores and PBIT margin expanding to 23.8% (up from 21% in Q4 FY25). Full-year sales for the segment grew 46% YoY to INR5,138 crores, with PBIT at 21.9% of sales. Notable wins include the highest single domestic order for transformers worth INR641 crores from PowerGrid Corporation and the largest power transformer export order of INR900 crores for a US data center.
Industrial Systems and Motors Business Update
Industrial Systems recorded Q4 sales of INR1,643 crores, a 5% YoY increase, with robust double-digit growth in motors. However, PBIT margins for the segment in Q4 were 9.6% (down from 11.2% in Q4 FY25) due to a mix change, competitive pricing in railways, and higher material costs for motors. Management indicated that motors growth was approximately 50-50 volume and price-led, with ongoing efforts to improve margins through cost initiatives and mix shaping.
Significant Capacity Expansions and Semiconductor Investments
CG Power is aggressively expanding its manufacturing capabilities. Transformer capacity is being increased from 65,000 MVA to a target of 110,000 MVA by the end of the calendar year through brownfield expansions in Gwalior and Bhopal, and a new greenfield plant. A greenfield expansion for the switchgear business, involving an investment of INR748 crores, was also approved. In the semiconductor space, CG Semi's G1 OSAT facility is operational, and the G2 facility, with a projected capacity of 14.5 million chips per day, is expected by the end of calendar year 2026, backed by INR3,501 crores in central government assistance.
Focus on Exports, Advanced Technologies, and Margin Improvement
Exports and services are strategic focus areas, with order bookings more than doubling YoY. The company is also investing in advanced technologies, with 400kV GIS commercialization targeted by FY27 and 765kV GIS under discussion. An investment of INR50 crores in EdgeCortix was made to bolster semiconductor design capabilities. Management is committed to moving railways business margins from single-digit to double-digit through operational efficiency, new product development, and a focus on services.
Challenges: Component Lead Times and Semiconductor Investment Impact
A key challenge highlighted was the 9-12 month lead time for critical transformer components like tap changers and bushings from Germany, which extends project delivery periods to 12-20 months. Additionally, continued investment in the semiconductor business, totaling INR111 crores for FY26, temporarily offset consolidated margins. Despite these, management expressed confidence in mitigating impacts through disciplined execution and strategic initiatives.