CGPOWER - Fundamental Analysis: Financial Health & Valuation

📈 Positive

• ROCE of 35.8% and ROE of 26.0% — excellent capital efficiency and shareholder returns.
• Debt-to-equity ratio of 0.01 — virtually debt-free, indicating strong financial discipline.
• Quarterly PAT growth of 38.0% — robust operational momentum.
• EPS of ₹7.22 — supports valuation and earnings visibility.
• FII holding increased by 0.35% — signals foreign investor confidence.
• Trading above DMA 200 — confirms long-term trend support.
• Volume above average — indicates strong market interest.

⚠️ Limitation

• P/E ratio of 104 vs industry average of 51.3 — significantly overvalued.
• PEG ratio of 3.38 — valuation ahead of earnings growth.
• Book Value of ₹48.7 vs current price of ₹736 — high P/B ratio.
• Dividend yield of 0.18% — minimal income for yield-focused investors.
• DII holding declined by 0.07% — reflects mild domestic investor caution.
• MACD negative at -3.13 and RSI at 46.7 — neutral to weak technical momentum.

📉 Company Negative News

• Stock corrected ~9.2% from its 52-week high of ₹811.
• MACD and RSI suggest short-term consolidation or weakness.

📢 Company Positive News

• Q2 PAT rose to ₹307 Cr from ₹286 Cr — steady sequential growth.
• Strong demand in industrial automation, power systems, and infrastructure segments.
• Stock up 74.4% over the past year — reflects investor confidence and sector momentum.

🏭 Industry

• Electrical equipment and industrial solutions sector benefits from infrastructure expansion, electrification, and automation trends.
• Industry P/E of 51.3 — CG Power trades at a premium, reflecting its leadership and growth expectations.
• Sector faces cyclicality and input cost volatility.

🧾 Conclusion

• Business Model: Leading provider of power transmission, distribution, and industrial automation solutions with a diversified portfolio.
• Competitive Advantage: Strong brand, wide product range, and strategic presence in infrastructure and industrial sectors.
• Entry Zone: ₹700–₹720 — near DMA 50 and technical support.
• Long-Term Holding: Suitable for growth-oriented investors with a 3–5 year horizon and tolerance for valuation risk.