Major Long-Term Supply Agreement of Worth Rs 450 Crore Secured by Leading Electrical Engineering Firm; Board of Company Likely to Announce Interim Dividend
Over the past year, the stock has delivered a return of 30.11 per cent, and over a three-year period, it has achieved a multibagger status with a return of 247.52 per cent.
CG Power and Industrial Solutions Ltd, a prominent player in the Electrical Engineering Industry, has announced a significant long-term supply agreement with Kinet Railway Solutions Limited. This agreement involves the supply and servicing of railway products, including propulsion kits, motors, transformers, and other items essential for manufacturing Vande Bharat trainsets. The initial purchase order under this agreement is valued between Rs 400 crores to Rs 450 crores, covering the supply for 10 trainsets. Additionally, a 35-year service order is part of this comprehensive agreement. With over 86 years of experience, CG Power has a strong presence in the Railway Industry, offering a wide range of products such as Traction Machines, Rail Transportation Traction Electronics, and Railway Signalling Products. The company has also ventured into the Train Collision Avoidance System (TCAS) domain, known as KAVACH.
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CG Power and Industrial Solutions Limited has announced a forthcoming Board of Directors meeting on 18th March 2024. The meeting's agenda includes the consideration of declaring an interim dividend for the financial year 2024-25. In compliance with SEBI's regulations on insider trading, the company has instituted a trading window closure for designated persons. This window will be closed from 11th March 2025 to 20th March 2025, encompassing the period of the board meeting. This measure is part of the company's adherence to its internal code on insider trading, ensuring compliance with regulatory standards. Stakeholders have been informed to take note of these developments.
CG Power and Industrial Solutions Limited, headquartered in Mumbai, India, operates as an engineering conglomerate with a strong focus on the Electrical Engineering Industry. The company has two main business lines: Industrial Systems and Power Systems, producing a variety of products for the Indian Railways and the Industrial and Power sectors. With 18 manufacturing plants across India and Sweden, CG Power employs around 3,113 people. Currently trading at Rs 613, the company has a market capitalisation of Rs 9,106.71 crores. Over the past year, the stock has delivered a return of 30.11 per cent, and over a three-year period, it has achieved a multibagger status with a return of 247.52 per cent. Since November 2020, CG Power has been part of the Murugappa Group, a diverse conglomerate with a rich history.
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In the Quarterly Results of December 2024, the company reported revenue of Rs 2,515.68 crore, reflecting a 27.13 per cent YoY growth and a 4.27 per cent QoQ increase from Rs 2,412.69 crore in September 2024. The net profit stood at Rs 240.53 crore, showing an 8.86 per cent QoQ increase from Rs 220.96 crore but a 67.82 per cent YoY decline from Rs 747.50 crore in December 2023. The net profit margin for the quarter was 9.56 per cent, compared to 9.16 per cent in the previous quarter and 37.78 per cent in the same quarter last year.
For the financial year 2024, the company reported revenue of Rs 8,045.98 crore, marking a 15.40 per cent growth from Rs 6,972.54 crore in FY23. The net profit for the year was Rs 936.23 crore, reflecting a 9.84 per cent increase from Rs 743.38 crore in the previous year. The net profit margin for FY24 was 9.24 per cent, compared to 9.71 per cent in FY23.
As of December 2024, the shareholding pattern stands as follows: Promoters hold 58.06 per cent, Foreign Institutional Investors (FIIs) hold 14.30 per cent, Domestic Institutional Investors (DIIs) hold 11.91 per cent, and the Public holds 15.73 per cent. Compared to the previous quarter, there are no significant changes in the shareholding pattern.
With a PE ratio of 99.3x, the company trades at a premium compared to the industry PE of 49.7x. The company has ROCE of 46.6 per cent and ROE of 24.5 per cent.
Investors must keep this Large-Cap stock on their radar.
Disclaimer: The article is for informational purposes only and not investment advice.