CG Power records 11% YoY fall in Q2 PAT; board OKs re-appointment of Natarajan Srinivasan as MD

CG Power and Industrial Solutions reported 11.3% fall in consolidated net profit to Rs 178.97 crore despite a 16.7% increase in revenue from operations to Rs 1,696.27 crore in Q2 FY23 over Q2 FY22.

On the segmental front, revenue from Power Systems was Rs 515.87 crore (up 32.1% YoY), that from Industrial Systems was Rs 1,176.70 crore (up 11.1% YoY) and Others revenue was Rs 4.06 crore (up 2.5% YoY) during the period under review.

Total expenses rose by 10.7% YoY to Rs 1,466.19 crore in the second quarter. Profit before tax in Q2 FY23 stood at Rs 241.70 crore, up by 2.4% from Rs 236.12 crore in Q2 FY22.

Current tax outgo was Rs 4.40 crore in Q2 FY23. The firm had written back current taxes amounting to Rs 0.55 crore in the same period last year.

Separately, CG Power said that its board has approved a proposal to expand the manufacturing capacity of Motors at its plants at Ahmednagar and Goa at a capital outlay of Rs.230 crore. The proposed expansion would increase the capacity of low tension motors' (LT Motors) upto 19.92 lakhs nos. per annum, from the existing capacity of 9.93 lakhs nos. per annum.

The current capacity utilisation is around 80%. The expansion project will be implemented in 2 phases over a period of 4 years and will be funded through internal accruals. The expansion is proposed considering the expected increase in future demand for AC motors.

The company's board has also accorded its approval to the re-appointment of Natarajan Srinivasan as managing director (MD) of the company for a further period of 1 year from 26 November 2022 upto 25 November 2023, subject to necessary approvals.

CG Power, part of the Murugappa group, has two segments - power systems and industrial systems. The power systems segment manufactures electrical products such as transformers, switchgears and circuit breakers, which find application in power transmission. The industrial systems segment manufactures high and low tension rotating machines (motors and alternators), stampings, as well as railway transportation and signalling products.

The scrip shed 0.67% to currently trade at Rs 259 on the BSE.

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