This Murugappa Group multibagger is outperforming markets ahead of its results; do you own it?

In FY22, the company delivered a stellar ROE and ROCE of 90.99 per cent and 84.18 per cent, respectively.

The shares of CG Power are seen outperforming on Thursday even as overall the market seems to be volatile on an intraday basis. CG Power shares are trading higher by more than 7.5 per cent on Thursday afternoon. In one month the stock is up by more than 24 per cent, while on a YTD basis the shares of CG Power are higher by 175 per cent in one year.

The company is expected to declare its Quarterly Results on July 26. 

CG Power and Industrial Solutions Ltd, a motor and generator manufacturing company, has generated multibagger returns for its shareholders in the last two years. During this period, the company’s share price appreciated by 2342 per cent, going from Rs 8.32 on July 21 2020 to Rs 203.20 on July 20 2022. With this price movement, the company has heavily outperformed the markets.

In the last one year, the company’s net revenue has increased 87.69 per cent YoY to Rs 5561.40 in FY22. Similarly, the PBIDT increased by 206 per cent to Rs 697.20 crore. The PAT during the year stood at Rs 913.42 crore, a de-growth of 28.6 per cent YoY, owing to a higher base of the previous year (due to an exceptional gain in FY21).

In November 2020, CG Power and Industrial Solutions was acquired by Tube Investments (TI) of India. FY22 was the first full year of operations under the new management. As a subsidiary of TI and part of the Murugappa Group, the company has been led by the Group’s strong ethics and governance. 

Owing to this, the company witnessed a complete operational and financial turnaround of the company. All the businesses bounced back and performed to their potential, regaining the confidence of customers and vendors. Moreover, during the year, several legacy issues were resolved, which led to an improved financial rating of the company.

CG Power and Industrial Solutions Limited is an Indian multinational company engaged in the design, manufacturing, and marketing of products related to power generation, transmission, and distribution & Rail Transportation. The company’s diverse portfolio ranges from transformers, switchgear, circuit breakers, network protection & control gear, project engineering, HT and LT motors, drives, Power Automation Products and turnkey solutions in all these areas.