CG Power and Industrial Solutions reported a 44 percent increase in quarterly net profit to Rs 409.09 crore for the September quarter. While strong order growth in the power systems business has driven performance, some analysts are highlighting concerns over rising receivables and cash flow management.
CG Power and Industrial Solutions reported a consolidated net profit of Rs 409.09 crore for the quarter ending September 2026, marking a 44 percent rise compared to Rs 284.44 crore in the same period last year. The company's total income reached Rs 3,883.25 crore, supported by steady contributions from both its primary business segments. The power systems division generated revenue of Rs 1,766.76 crore, while the industrial systems division contributed Rs 1,868.61 crore.
Order Inflow and Capacity Expansion
A major highlight for the company was the record-breaking order inflow of Rs 85 billion, representing a 78 percent year-on-year increase. To handle this rising demand from utility providers and data centers, the company’s management has approved new capital spending projects. These include an investment of Rs 44.62 crore for a brownfield project in Nashik and Rs 15.31 crore to boost EHV circuit breaker manufacturing. Additionally, the company is allocating Rs 68 crore to increase its power transformer manufacturing capacity by 10,000 MVA, with a target to complete these additions within 15 months.
Analyst Views on Valuation and Cash Flow
Market reaction to the results has been mixed, reflecting a divide among brokerage firms. Firms including UBS, Nomura, and Citi have maintained a positive outlook with 'Buy' ratings, citing the strong order backlog as a key driver for long-term value. UBS has specifically noted a potential upside to its target price of Rs 1,140 based on the current order momentum.
However, not all analysts share this optimism. Kotak Institutional Equities has retained a 'Sell' rating, raising concerns about the company’s rising receivable days, which measure how long it takes for a company to collect payments from customers. The brokerage also highlighted negative free cash flow during the first half of the fiscal year, suggesting that the company is spending more cash on operations and expansion than it is generating. Meanwhile, Jefferies has adopted a 'Hold' stance, noting that while the power systems segment remains strong, the performance of the industrial systems segment could continue to limit overall profitability.
Key Monitorables for Investors
Investors may look to track how effectively the company manages its working capital, particularly regarding the collection of payments from customers. The execution of the newly announced expansion projects will also be critical, as delays or cost increases could affect the return on these investments. The company's ability to balance its heavy order book with efficient cash generation will likely be a central focus in upcoming quarterly updates.