CG Power and Industrial Solutions Limited — Q4 FY26 earnings call

Call held 6 May 2026

Management summary

CG Power reported a strong Q4 and full year FY26, driven by robust performance in Power Systems and significant order book growth, providing strong revenue visibility. While Industrial Systems faced some margin pressures, strategic capacity expansions and investments in new technologies like semiconductors and GIS are underway. The company also highlighted challenges from component lead times impacting transformer delivery.

Highlights

  • Standalone Q4 FY26 sales grew 22% YoY to INR3,129 crores.

  • Standalone Q4 FY26 PBT (excluding EI) grew 43% YoY with 260 bps margin expansion.

  • Consolidated unexecuted order backlog reached INR17,107 crores, up 61% YoY, providing strong revenue visibility for FY27.

  • Power Systems segment delivered exceptional growth with Q4 sales up 50% YoY and PBIT margin expanding to 23.8%.

  • Strategic investments in semiconductor (CG Semi) and switchgear capacity expansion are progressing well, with significant government support for CG Semi.

Concerns

  • Industrial Systems PBIT margin in Q4 was 9.6%, down from 11.2% in Q4 FY25, due to mix change, competitive pricing in railways, and higher MSR for motors.

  • Consolidated margins were offset by continued investment in the semiconductor business, with an impact of INR38 crores in Q4 and INR111 crores for FY26.

  • Transformer delivery timelines are constrained by 9-12 month lead times for critical components from Germany, resulting in 12-20 month project execution periods.

Key financials

2 periods

Q4 FY26

  • Standalone Sales
    ₹3,129 Cr
    YoY +22%
  • Standalone PAT
    ₹412 Cr
    YoY +49%
  • Standalone PAT Margin
    13.2%
  • Consolidated Sales
    ₹3,442 Cr
    YoY +25%
  • Consolidated PAT
    ₹362 Cr
    YoY +32%
  • Consolidated PAT Margin
    10.5%

FY26

  • Standalone Sales
    ₹11,331 Cr
    YoY +21%
  • Standalone PAT (before EI)
    ₹1,352 Cr
    YoY +39%
  • Consolidated Sales
    ₹12,418 Cr
    YoY +25%
  • Consolidated PAT (before EI)
    ₹1,232 Cr
    YoY +27%

What they filed

Q1 FY27: revenue up 15.8%, net profit up 27.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,270 2,389 2,563 2,643 2,649 +17%2,909 +22%3,128 +22%3,061 +16%
EBITDA286 329 338 374 370 +29%408 +24%485 +43%437 +17%
Net profit223 244 275 286 307 +38%312 +28%412 +50%364 +27%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Sales (Q4 FY26)
₹3,130 Cr Total
  • Industrial Systems (Standalone) ₹1,643 Cr 52.5%
  • Power Systems (Standalone) ₹1,487 Cr 47.5%

Order book

high confidence

Total value

₹17,107 Cr

as of 2026-03-31 quantified

61% YoY

Inflow this quarter

₹5,335 Cr

Execution

offering revenue visibility spanning several future quarters

Composition

Mix 2 segments
  • Power Systems 73.9%
  • Industrial Systems 17.9%

Share of order book by segment· partial disclosure (91.8% of the book)

Continued momentum powered by disciplined execution and strategic focus, with strong order flow and penetration into new verticals and markets.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed CG Semi project includes central government assistance of INR3,501 crores and additional state government support of INR1,400 crores.
    • Greenfield expansion for switchgear business ₹748 Cr
    • CG Semi Pvt. Ltd. (OSAT facility) ₹7,584 Cr
    • Transformer capacity addition (Gwalior, Mandideep, Greenfield)
    The board of directors on 29th October '25 approved a greenfield expansion for switchgear business with an investment of INR748 crores (net of taxes). [...] total project cost of INR7,584 crores with central government assistance of INR3,501 crores and additional state government support equating to 40% of the central government assistance coming to about INR1,400 crores. [...] The Gwalior facility has now capacity increased from 6,000 MVA to 10,000 MVA and the Mandideep, Bhopal facility so there we have done capex and as per the capex plan the capacity is increased to 40,000 MVA
  • Dividend ₹1.3/share (interim)
    The board of directors of the company at its meeting held on 27th January, 2026 considered and approved the payment of interim dividend of INR1.3 per equity share, i.e. 65% of the face value of INR2 per share for financial year 25-26.
  • M&A EdgeCortix Acquisition · Closed · Consideration ₹[object Object] (cash)

    To build design capability and stay updated with technology.

    You made a recent investment of INR50 crores in EdgeCortix. Could you talk a little bit more about that and how to think through investments inside semiconductor design from there on?
  • Liquidity Liquidity disclosed QIP money of INR3,000 crores is parked into different asset classes.
    Ankur, you know the QIP money which has come up so it is parked into the different asset class.

Guidance & targets

Motors Business

  • Growth in motors Motors Business · Ongoing · High confidence Double-digit growth
    robust double-digit growth in motors

    — Mr. Amar Kaul

Transformer Capacity

  • Total MVA capacity Transformer Capacity · End of calendar year · High confidence 110,000 MVA

    Previously 65,000 MVA → 110,000 MVA

    So as of now if we total up between Gwalior and Bhopal, we have a capacity of 75,000 MVA and another 45,000 MVA to be added by the end of this calendar year. So this will be around 1,10,000 MVAs by the end of this calendar year.

    — Mr. Ajay Jain

GIS Commercialization

  • 400kV GIS commercialization GIS Commercialization · FY27 · High confidence Commercialization
    So 2027 financial should see the commercialization happening for 400kV GIS.

    — Mr. Gaurav Makhija

Drives Localization

  • Low voltage drives indigenous content Drives Localization · Ongoing · High confidence Almost 100%
    low voltage drives is almost 100% indigenous.

    — Mr. Amar Kaul

Exports & Services

  • Order bookings growth Exports & Services · Between last year and this year · High confidence More than doubled
    The only thing I can talk about is both the areas we have more than doubled our order bookings between last year and this year.

    — Mr. Amar Kaul

Railways Business

  • Growth rate Railways Business · Ongoing · Medium confidence High double-digit growth
    we see good potential for you know high double-digit growth there

    — Mr. Dhananjay Bapat

  • Margins Railways Business · Ongoing · Medium confidence Double-digit margins

    Previously Single-digit margins → Double-digit margins

    to continuously move this from single-digit margins to double-digit.

    — Mr. Amar Kaul

Semiconductor (CG Semi) Capacity

  • G2 facility capacity Semiconductor (CG Semi) Capacity · Once operational (end of calendar year 2026) · High confidence 14.5 million chips per day
    Once operational, G2 will scale up to the capacity of approximately 14.5 million chips per day.

    — Mr. Amar Kaul

Market context

  • Revenue visibility from order backlog Revenue Visibility · FY27 · High confidence Strong
    taking the order backlog up 59% year-over-year to INR15,719 crores and offering a strong revenue visibility for financial year '27.

    — Mr. Amar Kaul

What to watch in Q1 FY27

Greenfield Transformer Plant Commissioning

Next quarter (July-August)
Current Erection in progress, hope to commission between July and August.
Target Commissioning and initial capacity of 25,000-30,000 MVA.

Why it matters

This significant capacity addition is crucial for meeting growing demand and achieving the target of 110k MVA by year-end.

Now for the upcoming additions in capacity our Greenfield expansion so Greenfield plant erection is in progress and we hope to commission the plant somewhere between July and August. And initially we will be starting with the capacity of around 25,000 to 30,000 MVA and by the end of this calendar year we will be touching the peak of 45,000 MVA there.

Risks & concerns

  • Industrial Systems Margin Pressure

    medium

    Margin deviation in Q4 due to mix change, competitive pricing in railways business, and higher MSR for motors due to commodity impact.

    Management acknowledged

  • Transformer Delivery Constraints due to Component Lead Times

    medium

    Delivery of critical components like tap changers and bushings from Germany has a 9-12 month lead time, constraining overall transformer delivery to 12-20 months.

    Management acknowledged

  • Competitive Pricing in Railways Business

    medium

    Competitive pricing in railways business impacts margins, driving focus on operational efficiency and services.

    Management acknowledged

  • Impact of Semiconductor Business Investment on Consolidated Margins

    low

    Continued investment in talent pool for semiconductor business offset consolidated margins (INR38 crores in Q4, INR111 crores for FY26).

    Management acknowledged

  • Tariff Impact from Some Countries

    low

    Conscious decision to slow down business due to tariff impact from some countries.

    Management acknowledged

Q&A highlights

8 direct
Motors: Volume vs. Price Growth and Future Price Hikes Direct
on the motors side, I would say it was a combination of the price increase that we got from there from the customers and a combination I would say about 50-50% of both and the volume hike as well.

Clarifies the drivers of growth in the motors business and management's approach to pricing in an inflationary environment.

Asked by Ankur Sharma

Sustainability of Domestic Power Product Orders Direct
if I had to give a short answer, the game is just started. So INR900 crores is what we had to report because it was a substantial order that we have but after that also the tap is open and as you know we put our feet on the ground outside India as well, anything we touch you know it just opens up.

Provides management's optimistic outlook on the long-term growth potential of the power products business, beyond specific large orders.

Asked by Ankur Sharma

Explanation for INR3,000 Crores in Other Financial Assets Direct
Ankur, you know the QIP money which has come up so it is parked into the different asset class.

Clarifies the nature of a significant balance sheet item, confirming it's the proceeds from the recent QIP.

Asked by Ankur Sharma

G.G. Tronics Performance and Outlook Direct
I think the order backlog should be the tune of close to INR1,000 crores approximately. So right now you know if the second question might come for you know how, when do we start executing? We are at the last leg of the approval process which is the passenger trials which is already going on.

Provides specific order backlog and financial performance details for the G.G. Tronics business, indicating imminent execution start.

Asked by Mohit Kumar

Jump in Trade Receivables Direct
So you look at that the growth which is coming mainly in the power segment, right? So if you look at even that the return of capital employed on the power side is more than 100% plus. So the receivables which are there today it's coming more from the power side and the average credit period is ranging between 90 to 100 days.

Explains the increase in receivables as a consequence of strong growth in the power segment and its typical credit cycles.

Asked by Mohit Kumar

Update on GIS Commercialization (400kV and 765kV) Direct
So for 400 kV GIS the plan is exactly on the schedule there. We have already tested the phase one of our GIS portion. The phase two is scheduled between quarter two and quarter three. So yes, once we have the type test done in any of these international labs we should be out with our commercialization for 400 kV GIS. Yes, further to that 765kV is on the conversation there. Yes, so 2027 financial should see the commercialization happening for 400kV GIS.

Provides a clear timeline for the commercialization of a key new product, 400kV GIS, and confirms plans for 765kV.

Asked by Harshit Patel

Power Transformer Delivery Timelines for US Market Direct
I see the delivery of transformers for the US market basically depends upon the delivery of the components like tap changer and bushings. Even though we can manufacture a transformer earlier than that, but we will always be dependent on the tap changer deliveries which come from Germany. And they are anywhere between 9 to 12 months. So as of now, we are constrained, we can deliver from 12 month onwards only because of this reason.

Highlights a key constraint (component lead times) impacting execution speed for large transformer orders, particularly for the US market.

Asked by Rahul Gajare

Railways Business Margin Tracking Direct
Important is your operational efficiency and second lever that Dhananjay has already activated as a part of overall theme I mentioned is services. So service is going to be a big function of us and he's already created that vertical and is getting driven so that will give us substantial increase in our margins but again it doesn't happen tomorrow it takes a bit of time but he's executing it fairly well.

Explains the strategic levers (operational efficiency, services, new product development) being used to improve margins in the competitive railways business.

Asked by Shirom Kapur

3 min read 7 chapters

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 items) 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 items) 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.

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