CG Power has rallied 29% in 2026, but analysts are still raising their bets
CG Power and Industrial Solutions has rallied 29% in 2026, and its latest earnings have given investors further reason for optimism. But the bullishness around the stock goes beyond a strong quarter and a rising share price.
India's push to modernise its power grid, expand transmission networks and ramp up industrial capital expenditure is creating a multi-year growth opportunity for electrical equipment makers, with CG Power well-positioned to capitalise on the trend, according to analysts.
CG Power's consolidated net profit surged 44% to ₹409.09 crore in the July-September quarter (Q2 FY27), up from ₹284.44 crore a year earlier. Revenue from operations rose 30% year-on-year to ₹3,801.54 crore.
Analysts have taken note, raising earnings estimates, upgrading ratings and initiating coverage as they reassess the company’s growth potential.
Analyst optimism
According to Bloomberg data, 21 analysts have a ‘buy’ rating on CG Power, while two have a ‘hold’ rating and two recommend selling the stock.
Nomura, in its 23 October report, raised its FY28-29 earnings-per-share estimates by 4% after the power systems segment outperformed in Q2FY27. It reaffirmed its 'Buy' rating with a target price of ₹1,100. Emkay Global Financial Services remains positive on CG Power’s long-term prospects, citing its strong product portfolio and execution track record. However, given the stock’s premium valuation, it retained its 'Add' rating and target price of ₹925 in its 25 October report. Dolat Capital, meanwhile, sees an opportunity after the stock corrected 17% from its July 2026 high, making valuations more attractive. It upgraded the stock to 'Buy' from 'Accumulate', while retaining its target price of ₹1,000, in its 24 October report.
Order book remains strong while emerging businesses of semiconductor design and manufacturing are future growth drivers, said Sunny Agrawal, head- fundamental research, SBI Securities.
He added that medium-term fair value lies between ₹950 and ₹980. However, slowdown in artificial intelligence (AI) capex could impact near-term sentiment on the stock.
CG Power and Industrial Solutions shares were trading 0.7% higher at ₹838.85 on the BSE at 12:12 pm on Tuesday.
YES Securities has initiated coverage on CG Power and Industrial with a ‘Buy’ rating and a target price of ₹985. Harsh Tewaney, lead analyst at YES Securities, sees CG Power as a key beneficiary of the massive grid infrastructure build-out, which has a clear visibility until FY36.
He explained that CG leads the low-tension motors market with a 38-39% share and holds 19-20% of the larger industrial motors market. Weak demand triggered fierce price competition, but the company successfully defended its market share. By 4QFY26, it had taken cumulative price hikes of 17.5% over 3-4 quarters, with a further 5% increase in 1QFY27, signalling easing pricing pressure and early signs of recovery, he said.
“Gaining market share despite price hikes speaks to CG Power’s strong customer loyalty, brand premium, product proposition and switching costs,” said Tewaney, adding that these strengths give the company a distinct edge over its peers.
In its 25 October note, InCred Capital Wealth Portfolio Managers said grid modernization and electronics manufacturing could drive CG Power’s long-term growth, while exports offer further upside. The company’s expansion of transformer capacity from 75,000 MVA to 1,30,000 MVA could support its next phase of growth, the brokerage house said while retaining its ‘Add’ rating but raising its target price to ₹1,060 from ₹1,000.
The strong quarterly results support the earnings-growth thesis, but the stock's premium multiple means that future returns will depend on sustained execution, margin delivery and cash-flow improvement, said Narendra Solanki, head, fundamental research - investment services, Anand Rathi Shares and Stock Brokers.
He identified state-run Bharat Heavy Electricals Ltd, Schneider Electric, ABB and Siemens as peers of CG Power across its industrial and power businesses.
According to Bloomberg, CG Power is currently trading at 79.42 times compared to five-year average multiple of 77.87.
“The valuation of CG Power as compared to its close peers seems at premium because the markets are also factoring its semiconductor business which is yet to contribute meaningfully to the earnings,” Solanki said.
Tewaney sees valuations as a concern, with the market chasing high-growth businesses with strong earnings visibility. Besides, he believes CG Power's semiconductor business is yet to make a significant contribution to earnings or be fully reflected in the stock's performance, leaving room for the rally to run further over the long term.
“One needs to keep a keen eye on potential risks such as supply chain snags, availability of key inputs, project delays, fierce competition in motors which could have a bearing on profitability,” Tewaney cautioned.
Some market participants have flagged a slowdown in transmission and distribution (T&D) capital expenditure, rising commodity prices and weak motor demand as key risks to CG Power's growth outlook.