CG Power at new high

about 2 months ago
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On the back of an over 5.5x surge in volumes, CG Power is right there today among the top five gainers on the BSE. Rising 7%, it hit a new 52-week high at Rs.584.90.

The company posted a decent set of earnings for Q4 and FY24. For the fourth quarter, its consolidated sales came in at Rs.2192 crore, up 15% (YoY). EBITD was also up 15% at Rs.332 and PAT was down 10% at Rs.234.

The company ended FY24 with a 15% rise in sales at Rs.8046 crore and PAT for the fiscal was at Rs.796 crore, up 9%.

On a standalone, margins were higher YoY at 15.1% of sales (14.1% of sales in last year) on account of higher realisations, favourable product mix, cost efficiencies and execution of export orders with better margins in Power systems and higher other income. This was partially offset by pricing pressure in Low tension motors business due to increased competition.

ROCE for FY24 was at 37% and Free cash flow generated for the year was Rs.784 crore.

Consolidated results include the performance of the operating Subsidiaries at Sweden, Germany and Netherlands (Drives and Automation Europe), CG Adhesives Products Ltd. (India), CG Semi Pvt. Ltd (India) and other non-operating and holding subsidiaries.

Company’s standalone unexecuted order book as at 31 Mar 2024 was 45% higher YoY at Rs. 6,276 crores (Rs. 4,319 crores as at 31 Mar 2023).

In FY24, the company’s Switchgear and Transformer Business achieved highest ever sales, order input and profits. The Railway business achieved highest ever sales, order input and profits. FY24 also saw an increase in market share of Motors Business on a higher base and against stiff competition.

The Company received approval from the Union Cabinet under India’s Semiconductor scheme to set up an Outsourced Semiconductor Assembly and Test (‘OSAT’) facility at Sanand, Gujarat. The estimated investment on the project over a period of five years is Rs. 7,600 crs and the same is expected to be funded by a combination of government subsidies, equity contribution and potential bank borrowings as required. Renesas Electronics Corporation, Japan and Stars Microelectronics, Thailand are the Technology and Joint Venture partners.

The Board of Directors approved expansion capex for Switchgears (Nashik) of Rs. 155 crs, Power Transformers (Bhopal) of Rs. 31 crs and HT motors (Bhopal) of Rs. 35 crs. Total expansion capex approved till date is Rs. 662 crs.

During the year, the company sold QEI LLC, USA and entire sale proceeds have been realised.

727.2 (+0.20)

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