This electrical equipment stock has catapulted over 8000% in 4 years

Shares of CG Power and Industrial Solutions jumped 5 per cent on BSE to Rs 501.20 in Wednesday’s intra-day trade on heavy volumes. The stock of the Murugappa Group company is just shy of its record high of Rs 501.75 touched on November 23, 2023.

The stock is trading higher for the fifth straight day and has rallied 10 per cent in this period.

Meanwhile, the joint venture between CG Power, Renesas Electronics Corp and Stars Microelectronics (Thailand) will set up an outsourced semiconductor assembly and test (OSAT) facility in India.

This facility will be set up in a land area of around 28 acres with an investment of Rs 7,600 crore spread over a period of five years.

This facility will manufacture a wide array of products – ranging from legacy packages such as QFN and QFP to advanced packages such as FC BGA, and FC CSP, which will cater to industries like automotive, consumer, industrial and 5G to name a few.

The facility will have a capacity to ramp up production to 15 million units per day, the company said.

Meanwhile, since April, thus far in the financial year 2023-24, the market price of CG Power has zoomed 67 per cent. In the past four years, the stock price of the company has skyrocketed over 85 times or a whopping 8,468 per cent from a level of Rs 5.85.

At 11:45 am; CG Power was trading 2.5 per cent higher at Rs 490.50 as compared to a 0.19 per cent rise in the S&P BSE Sensex. A combined 5.35 million equity shares changed hands on the NSE and BSE.

CG Power is a subsidiary of Tube Investments and the leader in the electrical engineering industry. It has two business lines—Industrial Systems and Power Systems.

It manufactures Traction Motors, Propulsion systems, Signaling Relays etc., for the Indian Railways, and a wide range of Induction Motors, Drives, Transformers, Switchgears, and other allied products for the Industrial and Power sectors.

Recently, the company also made a foray into the business of consumer appliances such as fans, pumps and water heaters.

In August 2020, the parent won the bid to acquire a controlling stake in CG Power. The company has repaid its entire debt and has become a gross debt-free company.

Rating agency India Ratings and Research believes the CG Power's strong performance is likely to continue over the medium term, driven by its healthy order book and strong market position, especially in the industrial segment.