CG Power shares rise after bagging 'KAVACH' order from Indian Railways

Shares of CG Power and Industrial Solutions surged up to 2.63 per cent at Rs 754.80 per share on the NSE in Wednesday’s intraday deals after the company announced that its subsidiary GG Tronics secured a ‘KAVACH’ order from Chittaranjan Locomotive Works (CLW), West Bengal, Government of India. CLW is an Indian Railways-owned electric locomotive manufacturer. 

 

“The scope of the order comprises supply, installation, testing, and commissioning of Onboard ‘KAVACH’ equipment as per RDSO specifications including annual maintenance for 11 years. The Supply scope also includes complete wiring, harnessing, cabling, and connection with the Loco ‘KAVACH’ system,” the company said in an exchange filing on Wednesday.  

 

The order value for the contract ranges between Rs 500 crores to 600 crores and the project will be executed in one year, the company said. 

 

GGTronics, headquartered in Bengaluru specialises in designing, manufacturing, supplying, and installing electronic safety embedded signalling systems for the railway transportation segment. Among its notable offerings is the train collision avoidance system (TCAS), also referred to as automatic train protection systems (IRATPS) or 'KAVACH,' for which GGT is a developmental vendor.

CG Power Q2FY25 results

On the financial front, the company's net profit declined by 8.8 per cent in the recently concluded second quarter results for the financial year 2024-25 (Q2FY25) from the year-ago quarter, totaling Rs 221 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) also decreased by 4.6 per cent on a year-on-year basis to Rs 294.7 crore.

 

The Ebitda margin for the quarter dropped by 320 basis points to 12.2 per cent, compared to 15.4 per cent in the same quarter last year. However, revenue for the quarter rose by 20.5 per cent, reaching Rs 2,412.7 crore, up from Rs 2,001.5 crore in the corresponding quarter of the previous year.

CG Power share price history

CG Power’s stock performance has outperformed the market year to date as it has risen 66 per cent, while gaining 74 per cent in the last one year. In comparison BSE Sensex has risen 10.5 per cent year to date and 21.1 per cent in a year. 

 

The company has a total market capitalisation of Rs 1.14 trillion.  Its shares are trading at a price to earnings multiple of 123 times and at an earning per share of Rs 5.97. 

 

At 11:35 AM; the shares of the company were trading 2.42 per cent higher at Rs 753.25 a piece. By comparison, the NSE Nifty50 was trading flat at 24,203 level.