CG Power Q2 Results: Stock rises despite earnings missing street expectations

Shares of CG Power gained up to 2% on Wednesday, October 29, despite its September quarter results missing street expectations.

CG Power's net profit increased over 30% from last year to ₹286.7 crore. However, a CNBC-TV18 poll had projected that figure to be ₹313 crore.

Revenue for the quarter stood at ₹2,922.8 crore, which is a growth of 21% from the year-ago period, but also below what the CNBC-TV18 poll figure of ₹3,283 crore had projected.

The company's Earnings Before Interest, Tax, Depreciation and Amortisation grew by 28% on a year-on-year basis to ₹377 crore, which also fell short of the CNBC-TV18 poll figure of ₹431 crore, while margins expanded by 70 basis points from last year to 12.9% from 12.2%. A CNBC-TV18 poll had pegged the figure to be 13%.

In its post-earnings release, the company highlighted that orders remained robust with the backlog now at ₹13,568 crore, underpinning visibility for multiple quarters.

Sales for the Industrial Systems business were down 2% from last year, driven mainly by some project deferments in the railway segment. Margins narrowed for this segment due to lower operating leverage, rise in commodity prices which were not fully passed on, and deferred order execution.

On the flip side, sales for the Power Systems business increased by 48% from last year to ₹1,254 crore. Margin expansion was driven by better price realization, and improved operating leverage.

Additionally, the board of directors has also approved a greenfield expansion for its switchgear business, which will entail a capex of ₹748 crore. The expansion is to cater to the expected increase in demand for MV/EHV circuit breakers, instrument transformers and gas insulated switchgears in the domestic and exports market.

CG Power's subsidiary CG Semi Pvt. Ltd. is eligible for capital assistance as per the OSAT facility launched by the India Semiconductor Mission. The approval covers a five-year period, of which the central government will provide assistance of ₹3,501 crore out of the total project cost of ₹7,584 crore, CG Power said in its notes to account. There will also be additional state government support worth ₹1,400 crore.

CGSEMI has recognized ₹475.38 crore during the quarter as government grant, which have been netted off against the carrying amount of related assets as of September 30, 2025.

Shares of CG Power saw a sharp spike towards the close of the trading session, ending 4.3% higher at ₹753.45. The stock has remained flat on a year-to-date basis.