CG Power positive catalysts: transformers, OSAT push

Why CG Power is trending in 2026

CG Power and Industrial Solutions has been widely discussed for capacity expansion and new execution milestones. Social feeds focused on transformers, EHV switchgear, and the semiconductor packaging venture. Motilal Oswal Financial Services has reiterated a Buy rating in multiple updates during 2026. The July 24, 2026 result note flagged weaker-than-expected Q1 FY27 execution. Even so, the broker highlighted clear capacity-led growth drivers. A September 3, 2026 company visit update again retained Buy and raised its target price. ICICI Securities also maintained a BUY call, positioning CG Power as a proxy for major capex cycles. The overall conversation is about scaling manufacturing while keeping orders and margins supportive.

Motilal Oswal: Buy stays, but estimates were trimmed

Motilal Oswal retained its Buy rating in the July 24, 2026 result update. It reduced FY27E and FY28E estimates by 3% and 4%, respectively. The cut followed weaker-than-expected Q1 FY27 execution, as cited in the note. Power Systems revenue still grew 31% year on year to Rs 14 billion, broadly in line with estimates. The broker expects benefit from transformer, switchgear and circuit-breaker capacity additions. It also expects price increases and gradual demand recovery in Industrial Systems. Another stated positive is lower CG-SEMI losses by FY28. This framing matters because it separates near-term execution noise from medium-term capacity and mix improvements.

Sehore greenfield transformer plant changes the scale

The September 3, 2026 update was based on a visit to the Sehore transformer facility in Madhya Pradesh. Motilal Oswal said the Sehore greenfield plant has manufacturing capacity of 45,000 MVA. This lifts CG Power’s total transformer capacity to 120,000 MVA from 23,000 MVA in FY25, as stated in the update. Management said the capacity was commissioned in 13 months. Management also said the plant can be scaled further depending on demand and supply conditions. Exports are being targeted at up to 30 per cent of output from the new facility. The update cited opportunities linked to US data centres, renewable energy, and customers in Europe and Greece.

Existing transformer pipeline and phased additions

Earlier discussion around transformers also highlighted an expansion pipeline already underway. Transformer capacity was described at about 75,000 MVA at the time of the July 24 note. An additional 45,000 MVA was planned in phases over the next 12 to 14 months. These figures were a key anchor for social media threads on execution visibility. The logic is straightforward: capacity constraints can limit delivery even with a strong order pipeline. The Sehore capacity addition complements the earlier phased plan described by the broker. Motilal Oswal expects enlarged capacity and pricing power to support growth in Power Systems. It also mentioned backward-integration initiatives as another driver. The market is tracking whether these expansions translate into sustained deliveries.

Switchgear expansion: Nashik EHV milestones and new capex

CG Power commissioned Phase 2 of its Nashik EHV switchgear facility, as cited in broker commentary. This increased EHV circuit-breaker capacity by about 80%, from 9,000 to 16,200 units annually. Separately, the company commissioned and began commercial production at its S3 Unit-II EHV switchgear facility in Nashik on June 4, 2026. The S3 Unit-II project involved a Rs 39.49 crore investment financed via internal accruals. Another update noted the expansion takes EHV circuit breaker capacity to about 16,000 units annually. After Q1 FY27, CG Power also approved a Rs 35.17 crore brownfield project at Nashik to double its Gas Insulated Switchgear capacity. Together, these items shaped the view that management is prioritising execution and de-bottlenecking.

Industrial Systems: weak FY26, but Q1 FY27 improved

Motilal Oswal stated that Industrial Systems demand was weak in FY26. It also said conditions began improving in Q1 FY27. Order inflows in Q1 FY27 rose 25 per cent year on year, as per the September 3 update. CG Power has expanded capacity across LV motors, HV motors and stampings. The additions included 80-132 and 160-355 frame LV motors, as cited. Motilal Oswal expects improving private-sector demand to support motor growth. It also flagged that railway demand remains weak. This mix matters because the industrial recovery is presented as gradual, not uniform.

Semiconductors: Sanand OSAT ramps, policy is a catalyst

CG Semi has launched India’s first OSAT unit in Gujarat, per the context provided. Phase 1 of the Sanand OSAT facility has begun commercial production. Phase 2 remains targeted for commissioning by FY27-end. Another update stated CG Power commenced commercial production at its G1 OSAT facility in Sanand on July 4, 2026. The unit has been a major talking point because it moves the story from capex to operations. The company also partnered with Renesas and Stars Microelectronics. Union Minister Piyush Goyal announced an upcoming regulatory framework to waive BIS compliance on imported inputs for advanced-tech industries like semiconductors. Social media framed this as an operational catalyst that could ease input-related friction for OSAT scaling.

Financial performance: FY26 base and Q1 FY27 start

CG Power had previously announced record financial results for FY26, as cited in the context. Standalone sales grew 21% year on year to INR 11,331 Cr. FY26 PAT increased 39% year on year to INR 1,352 Cr. Another dataset in the context noted FY2026 revenue of ₹124.2b and net income of ₹12.0b, with profit margin at 9.7%. In Q1 FY27, standalone PAT rose 27% to ₹364 crore, driven by order inflows and margin expansion in Power Systems. Q1 FY27 consolidated net profit rose 16.2% to ₹313.01 crore on operational revenue of ₹3,280.81 crore. The company also said its order book grew 45% from a year earlier.

Forecasts, targets, and a quick snapshot table

Motilal Oswal forecasts total order inflow CAGR of 11% over FY26 to FY29E. It also forecasts consolidated revenue, EBITDA and PAT CAGR of 25%, 33% and 28%, respectively, over FY26 to FY29E. In the September 3 update, Motilal Oswal raised its sum-of-the-parts target price to Rs 1,020 from Rs 975 through a valuation roll-forward. ICICI Securities maintained a BUY with a target price of Rs 1,120, versus a CMP of Rs 960 in its June 22, 2026 report. ICICI forecasts revenue CAGR of about 27% over FY26 to FY29E, with EBITDA and PAT CAGR of about 35% and 34%, respectively. Investors are also tracking Axiro Semiconductor’s portfolio buildout after it completed a ₹16.44 crore acquisition of Tosil Systems on August 20, 2026. The deal adds embedded silicon and Edge AI design capabilities to Axiro’s portfolio.

What investors are watching next

One key watchpoint is whether the expanded transformer capacity sustains deliveries without margin pressure. Another is the pace of commissioning and ramp-up across switchgear and GIS. Industrial Systems is being watched for a broader demand recovery beyond Q1 FY27. Motilal Oswal’s mention of price increases and recovery implies that product mix and pricing discipline matter. For semiconductors, investors are tracking Phase 2 commissioning timelines and the trajectory of CG-SEMI losses toward FY28. Regulatory clarity on the proposed BIS waiver for imported inputs is also being monitored. Execution is also being debated given the July note’s reference to weaker Q1 FY27 execution versus expectations. Finally, the market is comparing valuation and growth expectations across broker models, including the roll-forward in Motilal Oswal’s target price.