UBS sees 35% potential upside in this heavy electrical equipment company: Check details

Foreign brokerage UBS has retained its ‘buy’ view on CG Power and Industrial Solutions with a raised target of Rs 850 per share. The new target implies a possible upside potential of 35 per cent in the stock.

The brokerage believes that the company has made capital allocation prudently and timely capacity will facilitate bottomline at the company. Furthermore, medium term demand drivers are in place on the back of robust capital allocation. 

Besides, the company offers the best-in-class profitability and significant option value.

CG Power shares have recorded gains to the tune of 65 per cent in the last one month, while its 1-month return is at 13 per cent.

The company in an exchange filing earlier this month stated that it received a demand order by the GST department imposing penalty to the tune of Rs 70,279 on account of excess refund received for FY 2018- 19. 

There is no material impact on financial, operations or other activities of the company, it added.

CG Power Q4 results 

Earlier in May, the company posted a 10 per cent  dip 10 per cent dip in consolidated net profit to Rs 234 crore for March quarter FY24, mainly due to higher expenses.

Its net profit (from continuing operations) was Rs 260 crore in the quarter ended March 31, 2023, a regulatory filing said. Total income rose to Rs 2,239.83 crore from Rs 1,917.05 crore in the year-ago period. Total expenses also surged to Rs 1,932.80 crore from Rs 1,654.63 crore in the same period a year ago.

However, consolidated net profit (from continuing operations) rose to Rs 871 crore in fiscal 2023-24 from Rs 796 crore in 2022-23.

(With PTI inputs)