01 — At a Glance
The Turbo Charger That Just Got Turbo Charged
- 52-Week High / Low₹798 / ₹518
- Q3 FY26 Revenue (Standalone)₹2,909 Cr
- Q3 FY26 PBT (w/ Exceptional)₹454 Cr
- Annualised EPS (Q3×4)₹7.24
- Full Year Sales (TTM)₹11,729 Cr
- Book Value (Latest)₹47.4
- Price to Book15.1x
- Dividend Yield0.18%
- Debt / Equity0.02x
- Order Backlog (Jun 2026)₹14,859 Cr
The Big Picture: CG Power closed Q3 FY26 with ₹2,909 crore standalone revenue (+22% YoY), ₹454 crore PBT, and just bagged a ₹900 crore data-center transformer export to the U.S. Backlog surged 66% to ₹14,859 crore. So why does the stock trade at P/E 101? Because the market is pricing in a decade of compounding, and it’s scared to miss it. That fear has a name: momentum.
02 — Introduction
The Transformer Company That Became a Growth Stock (By Accident)
CG Power & Industrial Solutions is not a household name. But in Indian power equipment circles, it’s basically the guy who walks into a room and everyone immediately wonders if they’re underbidding the deal. The company makes three things: large motors and generators, transformers (big and boring), and — newly — semiconductors (not boring).
For a long time, CG Power was a “utility play.” Stable, profitable, capital-intensive, return-constrained. Then something changed. Government capex hit the accelerator. Power demand spiked. Transformer capacity became scarce. And suddenly, the boring utility play started growing at 26% (YoY consolidated revenue), posting 37.5% ROCE, and landing ₹900 crore export orders in the United States.
The stock reflected this perfectly — up 33% over 3 years, 63% over 5 years. But here’s the thing: the stock price has accelerated faster than the earnings. P/E has expanded from 40x to 101x. The market is no longer pricing the current profit. It’s pricing a narrative about what happens if management pulls off a three-part bet: (1) transformer capacity expansion done in record time, (2) industrial electronics/semiconductor scaling without massive capex drag, and (3) export ambitions becoming real revenue. Right now, only part (1) is proven.
Feb 2026 Concall Tone: Management rejected “slowdown” narratives aggressively. Every question about competition or market saturation was met with: “level playing field” and “we’re prepared for worst-case scenarios.” Translation: they know the valuation is stretched. They’re working to justify it.
03 — Business Model: WTF Do They Even Make?
Transformers, Motors, Semiconductors. In That Order. Seriously.
CG Power operates two main segments: Power Systems (35% of FY25 revenue) and Industrial Systems (64% of FY25 revenue). Think of it as: the stuff that distributes power, and the stuff that uses power.
Power Systems: Makes transformers (power & distribution), circuit breakers, switchgears, EHV instrument transformers, and offers turnkey T&D solutions. Basically, the guts of a power grid. Market position is strong but not monopolistic. Demand is tied to power infrastructure capex — which India is absolutely splurging on right now. Management reports Power Systems revenue surged 44% YoY in Q3.
Industrial Systems: AC/DC motors, pumps, fans, rolling stock for railways, and hazardous-area equipment. Market leader in low-tension motors. Number 2 in AC generators and DC motors. Railways segment growing but recently disrupted due to supplier issues (now “fixed”). Motors grew 8% despite “significant commodity inflation.” The subtext: pricing power exists, but doesn’t cover rising input costs fully.
The Bet: Semiconductors (OSAT — outsourced semiconductor assembly). In partnership with Renesas Electronics and Stars Microelectronics, CG is building a ₹7,600 crore chip packaging facility in Gujarat with a capacity of 15 million units daily. Mini-plant (M1) launched. Bigger plant (M2) launching end-Dec 2026. Yields already at 98–99%. Management expects “decent sales” in 2–3 quarters. This is a 3–5 year story, not a 12-month story.
Power Systems35%FY25 Mix
Industrial Systems64%FY25 Mix
LT Motors Leadership🥇Market Rank
Capital Intensity Note: CG committed ₹688 crore capex for capacity expansion across transformers (+23k MVA), motors (+8 lakh units), and switchgears (+various). Additional ₹712 crore (net of taxes) approved for greenfield power transformer capacity. This is not a light capex play. But backlog-to-sales ratio is 127% (₹14,859 Cr backlog vs ₹11.7 Cr annual sales), so the question is not whether the capex will be absorbed — it will be. The question is whether margins stick as capex normalizes.
💬 Which bet excites you more: transformer export dominance, or semiconductors becoming a 20%+ margin contributor in 5 years? Drop your thesis in the comments.
04 — Financials Overview
Q3 FY26: All-Time High. So Far.
Result type: Quarterly Results (Q3 FY26) | Standalone Revenue: ₹2,909 Cr | Q3 EPS: ₹1.81 | Annualised EPS (Q3×4): ₹7.24 | TTM EPS: ₹7.17
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue (Standalone) | 2,909 | 2,368 | 2,649 | +22.8% | +9.8% |
| Operating Profit | 386 | 329 | 341 | +17.3% | +13.2% |
| OPM % | 13.3% | 13.9% | 12.9% | -60 bps | +40 bps |
| PBT (w/ Exceptional) | 454 | 336 | 347 | +35.1% | +30.8% |
| PAT / Net Profit | 336 | 254 | 245 | +32.3% | +37.1% |
| EPS (₹) | 1.81 | 1.37 | 1.57 | +32.1% | +15.3% |
The Exceptional Item Caveat: Q3 PBT of ₹454 Cr includes an exceptional benefit from the new labour code (effective Nov 21, 2025). Management confirmed this is a one-time bump. Excluding this, underlying PBT is closer to ₹410–420 Cr — still +23% YoY. For P/E purposes, you should use TTM EPS of ₹7.17 (which already accounts for trailing twelve-month fundamentals), giving a P/E of 99.8x at ₹715. The annualised Q3 EPS of ₹7.24 is slightly optimistic, as it assumes the exceptional item repeats (unlikely) and ignores seasonality.
05 — Valuation: The P/E Stretch
Is 101x P/E Justified? Let’s Do The Math.
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