CGPOWER - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.4

CG Power is electrifying investor interest with sharp capital metrics—but its valuation may be sparking a bit too brightly. Let's break down the voltage behind this midcap energy-tech name

⚡ Core Financial Pulse

EPS: ₹6.56 — decent profit per share, though growth feels tapering.

ROE: 27.6% | ROCE: 37.5% — exceptionally high, signaling stellar asset and equity utilization.

PAT Qtr: ₹267 Cr vs ₹272 Cr — slight dip, but still healthy quarterly profit.

Debt-to-Equity: 0.01 — virtually debt-free; rare in industrials.

Dividend Yield: 0.20% — minimal payout, shows reinvestment focus.

📊 Valuation Snapshot

P/E: 104 vs Industry PE: 57.2 — richly valued; expectation of high growth priced in.

P/B Ratio: ~26.3 (₹659 ÷ ₹25.1) — extremely high; market is paying a premium for future outlook.

PEG Ratio: 9.54 — red flag; valuation overshoots earnings growth.

Intrinsic Value Estimate: ₹520–₹570 — stock currently trades well above intrinsic comfort zone.

🏭 Business Model & Strategic Edge

Sector: Power equipment, automation, and industrial systems.

Strengths

Plays into India’s electrification boom and infra expansion.

Operational turnaround post-acquisition by Tube Investments.

Broad customer base across OEMs, utilities, and global markets.

Risks

High valuation leaves little margin for error.

Growth moderation could trigger sharp corrections.

Low dividend yield may not suit income seekers.

📉 Technical & Market Sentiment

RSI: 41.9 — tilting toward oversold; hints at correction or consolidation.

MACD: -2.75 — bearish momentum signal.

Volume below weekly average — soft trading interest, price drift likely.

📍 Suggested Entry Zone

₹520–₹570: Aligns with intrinsic and technical base; better risk-reward setup.

Consider partial entry only if price revisits support or signs of bullish reversal emerge.

🧭 Long-Term Holding Perspective

CG Power could fit a 5–7 year growth portfolio based on

Demand surge in automation, industrial infra, and grid tech.

Synergies under Murugappa Group management.

Expansion into high-margin smart solutions.

More volatile than your usual utility pick, but for those betting on India's manufacturing rise, it might just light up the returns board.

Want me to contrast it with players like Siemens or ABB India to see who’s got more current flowing through their fundamentals? I’m all charged up. 🔌📈⚙️

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