In addition to steady Q3 results, the gains for the capital goods major were on account of reasonable valuations and preferential EU market access for engineering goods. Prior to Wednesday’s rally, the stock had been on a downtrend since September last year, falling 33 per cent during this period. The company reported its December quarter (Q3 FY26) results on Tuesday.
In Q3, consolidated net profit came in at ₹284.83 crore, compared to ₹240.53 crore a year ago, up 18 per cent. Revenue from operations stood at ₹3,175.35 crore, compared to ₹2,515.68 crore year-on-year (Y-o-Y).
Emkay Global Financial Services has upgraded CG Power to a buy, citing valuation comfort after the recent correction, with the stock trading at 45 times its FY27 earnings and 36 times its FY28 profit estimates.
The brokerage said Q3 FY26 results were broadly in line — a small operating profit miss was offset by higher other income. Power Systems and Industrial Systems both delivered strong execution backed by a healthy order backlog. Emkay Research noted that Power Systems continues to benefit from a strong demand environment and better pricing, whereas Industrial Systems profitability was pressured by lower price realisations, an unfavourable railways mix, and higher input costs in motors.
The company reported ₹4,400 crore in order inflows, taking the order book to ₹15,750 crore, up 62 per cent Y-o-Y, with a strong enquiry pipeline across businesses and geographies, and exports up 50 per cent in 9M FY26. Emkay Research added that the stock’s sharp correction was driven by concerns around Industrial Systems margins, broader market weakness, and reports on potential Chinese participation in government contracts.
It has cut its sum-of-the-parts-based target price (₹775), while maintaining a positive view on execution and backlog-driven visibility.
A key trigger for the stock going ahead could come from preferential EU market access for engineering goods. The company currently exports medium-voltage and extra-high-voltage switchgears to the EU. The free trade agreement with the EU should help Indian exporters win incremental orders and gain market share in the EU’s engineering imports.
B&K Securities believes that the company is well positioned for sustained growth, supported by robust traction in the Power Systems segment, expanding transformer exports and a strong transmission pipeline. While Industrial Systems margins are currently pressured by commodity inflation, ongoing pricing discipline and cost optimisation should aid gradual recovery. With structural supply tightness in transformers, capacity additions ahead of schedule and improving export momentum, earnings visibility remains strong over the medium term.
Nomura said CG Power’s Q3 FY26 ordering stayed broadly in line, but earnings missed estimates. The brokerage cut earnings per share (EPS) by 7–9 per cent for FY26–FY28 due to commodity headwinds and front-loaded costs. While the company hiked prices by 17 per cent in the Industrial Systems segment during YTD FY26 to pass on inflationary pressures to customers, the brokerage believes that the sharp rise in key commodities such as copper (38 per cent in January 2026 versus Q4 FY25) and a softer demand environment may weigh on margin recovery.
The brokerage maintains a buy rating with a lower target price (₹820) after trimming the valuation multiple to reflect commodity volatility and potential China competition risks, while still forecasting 32 per cent earnings growth annually over FY26–FY28.
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