In Q2 FY 2024-25, CG Power and Industrial Solutions Ltd. reported impressive financial growth with sales reaching Rs 2,270 crores, marking a 19 per cent year-over-year increase, while pre-tax profits (PBT) rose to Rs 298 crores, with adjusted PBT at Rs 334 crores. This growth was driven by strong sales performance and strategic expansion efforts, despite a marginal decrease in PBT percentage due to exceptional expenses linked to acquisitions and consultancy.
The company's order intake for the quarter saw a notable 43 per cent growth year-over-year, amounting to Rs 3,196 crores, with an unexecuted order backlog standing at Rs 7,831 crores—50 per cent higher than the same period last year. This reflects robust demand, particularly in their Power and Industrial Systems segments.
Segment-Wise Performance:
Industrial Systems reported sales of Rs 1,425 crores, an 11 per cent increase from the previous year. However, the segment's profit before interest and taxes (PBIT) was lower at Rs166 crores compared to Rs 207 crores in Q2 FY24, due to changes in the sales mix, favouring the railways business, and sluggish demand for motors.
The order intake for Industrial Systems was strong, recording a 56 per cent growth YoY at Rs 1,732 crores, with an unexecuted order backlog of Rs 2,700 crores, representing a 45 per cent increase YoY.
Power Systems achieved sales of Rs 846 crores, reflecting a substantial 37 per cent growth. PBIT for the segment was Rs 149 crores (17.6 per cent of sales), up from Rs 103 crores the previous year, driven by operational efficiencies and cost management. The segment also recorded a significant order intake of Rs 1,463 crores (31 per cent growth YoY) with an unexecuted order backlog of Rs 5,131 crores—53 per cent higher YoY.
On a consolidated basis, including subsidiaries in Europe and India, sales rose to Rs 2,413 crores, with a 21 per cent year-over-year growth. Consolidated PBT for the quarter was Rs 294 crores, slightly down from Rs 303 crores in Q2 FY24 due to strategic expenses, but still reflecting the company's solid performance overall. Free cash flow for the quarter remained strong at Rs 223 crores.
Key developments during Q2 include:
Acquisition of G.G. Tronics India Pvt Ltd: CG Power completed its acquisition of a 55 per cent stake in G.G. Tronics, expanding its capabilities in locomotive train collision avoidance systems (Kavach).
Renesas Radio Frequency Components Business Acquisition: The company entered into a definitive agreement with Renesas to acquire its Radio Frequency Components (RFC) business for USD 36 million, marking CG Power's foray into the semiconductor design industry.
Capacity Expansion in Power Transformers: The company approved an additional Rs 27 crore investment to expand its transformer manufacturing capacity by another 5,000 MVA, raising total capacity to 40,000 MVA to meet anticipated demand.
With such initiatives and a healthy order backlog, CG Power is well-positioned for sustained growth in the coming quarters, leveraging its strategic acquisitions and capacity expansion plans to strengthen its market position across industrial and power systems sectors.
