CG Power share price falls 2.5% on Q2 miss; Emkay downgrades stock to 'Add'

CG Power's Q2FY26 earnings missed estimates on weak Industrial Systems margins, but strong Power Systems orders and new capex keep long-term growth prospects intact, say Emkay and Nuvama

CG Power and Industrial Solutions Ltd (CG Power) share price fell 2.5 per cent on the BSE on Thursday, October 30, 2025, after it reported a mixed set of numbers for the July–September quarter (Q2FY26).

 

While the company’s order inflows surged sharply, execution delays and margin pressures in the Industrial Systems business weighed on profitability. Analysts remain optimistic about its long-term prospects but remain cautious on the near-term upside.

 

Emkay Global Financial Services has downgraded the CG Power stock to ‘Add’ from ‘Buy’, even as it raised the target price by 11 per cent to ₹850.  Track CG Power share price LIVE here

 

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The brokerage said CG Power’s consolidated revenue (₹2,922.8 crore, up 21 per cent year-on-year/1.6 per cent Q-o-Q), Ebitda (₹376.7 crore, up 27.8 per cent Y-o-Y/down 1.2 per cent Q-o-Q), and profit after tax (₹284.4 crore, up 29.5 per cent Y-o-Y/6.6 per cent Q-o-Q) missed its estimates by 6-9 per cent due to weaker execution across both Power Systems and Industrial Systems divisions.

 

Profitability, it said, was hurt by muted price realizations, higher input costs, and operating deleverage - particularly in the railways segment under the Industrial Systems division. This, however, was partly offset by the Power Systems business.

 

The brokerage praised the company’s robust order inflows of ₹4,800 crore, up 45 per cent year-on-year, led by a sharp 81 per cent rise in Power Systems orders.

 

CG Power’s management, it said, remains confident about a strong enquiry pipeline across businesses and announced fresh ₹750-crore capex for expanding switchgear capacity to serve both domestic and export markets.

 

“Factoring in lower-than-expected execution and profitability, we reduce FY26–27 earnings by 7-8 per cent but broadly maintain FY28 estimates,” Emkay said, while highlighting the company’s continued strong return ratios and early-mover advantage in India’s nascent semiconductor ecosystem.

 

Meanwhile, Nuvama Institutional Equities has retained a ‘Buy’ rating on the CG Power stock with a target price of ₹870, citing strength in the Power Systems segment and growing opportunities in semiconductors.  ALSO READ | This smallcap stock rallies 13% as Q2 profit zooms 71% YoY; details inside 

The brokerage said CG Power’s Q2FY26 consolidated revenue grew 21 per cent year-on-year, driven by a 48 per cent rise in the Power segment, even as the Industrial Systems division slipped 1.8 per cent due to project deferrals and higher commodity costs.

 

Nuvama highlighted that the Power business sustained its strong momentum, with order inflows surging 81 per cent year-on-year and Ebit margins expanding to 20.7 per cent from 17.6 per cent in the year-ago period. By contrast, the Industrial Systems margin fell 460 basis points to 8.9 per cent. The brokerage trimmed FY26–27 earnings estimates by 11 and 2 per cent, respectively, but said the company’s order backlog of ₹14,950 crore (1.5x FY25 sales) and new capacity expansion in switchgear and transformers provide a solid growth runway.

 

Analysts highlighted the company’s ambitious push into semiconductors, including commissioning one of India’s first OSAT (Outsourced Semiconductor Assembly and Test) facilities at Sanand. While Nuvama sees this as a “long-term structural growth lever,” Emkay cautioned that execution and profitability challenges in the Industrial business could temper near-term performance.

 

Overall, analysts believe CG Power remains well-positioned to benefit from India’s industrial capex cycle, export opportunities, and the energy transition. However, the pace of recovery in its Industrial Systems business and the scale-up of semiconductor operations will determine whether the stock can sustain its sharp rally in 2025.