Can CG Power Share Price Touch ₹900 Anytime Soon? Here’s What UBS Says

Synopsis: UBS maintains a buy on CG Power & Industrial Solutions, raising its target to Rs. 900, citing 32% upside amid capacity expansion, export growth, and strong fundamentals, despite semiconductor segment losses affecting margins.

The shares of this company provide end-to-end solutions to industries and offer products, services and solutions in two main business segments which are Power Systems and Industrial Systems are in the spotlight after UBS raised its target price by 32% upside. 

With a market capitalisation of Rs. 1,07,566 cr, the shares of CG Power & Industrial Solutions Ltd were trading at Rs. 683 per share, up by 2.4% from its previous close of Rs. 667.80per share. The stock has returned 9% over the past year, gained 7% year-to-date, declined 10% in the last six months, and dropped 4% in the past month.

UBS Maintains Buy Rating on CG Power

UBS has maintained a “buy” rating on CG Power & Industrial Solutions Ltd and raised its price target to Rs. 900 from Rs. 840, indicating a strong upside potential of approximately 32%. The brokerage believes the company is at an inflection point, with previous challenges in industrial orders, margins, and rail execution largely behind it. 

CG Power remains well-positioned in the power segment, supported by ongoing capacity expansion and improving visibility in exports. While the scaling of exports may take time, the company’s strong fundamentals provide confidence in its growth trajectory. 

The company’s robust cash position post-QIP is expected to support future growth initiatives, including the expansion of its product portfolio and its ambitions in the semiconductor space. 

Despite these positives, the semiconductor (OSAT) business continues to weigh on margins, reporting higher losses in Q3. Overall earnings fell short of margin expectations due to ongoing investments in this segment, which remains a key area for improvement.

About the company 

CG Power & Industrial Solutions Ltd is a multinational engineering and electrical equipment company that designs, manufactures and sells a wide range of products for power generation, transmission, distribution and industrial applications. Its portfolio includes transformers, switchgear, motors, drives, traction systems, signaling equipment for railways and other electrical systems, serving sectors like utilities, industry and infrastructure. 

The reported strong year-on-year growth in Q3FY26, with sales rising 22% to Rs. 2,909 crore from Rs. 2,389 crore in Q3FY25. EBITDA grew 33% to Rs. 480 crore, while profit before tax increased 35% to Rs. 454 crore. Net profit rose 42% to Rs. 347 crore, translating to a PAT of Rs. 312 crore, up 28% from the same quarter last year, reflecting healthy operational performance and improved margins.

The Power Systems segment was the primary growth driver, with sales surging 44% YoY to Rs. 1,326 cr. This division saw significant margin expansion (378 bps), with PBIT reaching 21.4% of sales, fueled by robust execution and improved price realizations. The segment’s outlook remains exceptionally strong, evidenced by an unexecuted order backlog of Rs. 11,289 cr, which is an 89% increase over the previous year.

In contrast, the Industrial Systems segment reported more modest sales growth of 8% YoY at Rs. 1,585 cr. While the Motors and Railway businesses saw healthy volume, the segment’s PBIT margin contracted to 9.4%, down from 12.5% YoY due to higher commodity costs and changes in the product mix that could not be fully passed on to customers. Despite these margin headwinds, the order intake grew by 9% YoY, and the backlog stands at a healthy Rs. 3,569 cr. 

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