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Motilal Oswal Report
CG Power and Industrial Solutions Ltd. shares are likely to remain in focus after Motilal Oswal Financial Services reiterated its 'Buy' rating on the stock and raised its target price to Rs 1,020 from Rs 975, implying an upside potential of about 14% from the reports current market price of Rs 895.
The brokerage remains optimistic on the company's growth prospects, backed by a sharp expansion in transformer manufacturing capacity, improving industrial demand and the gradual scale-up of its semiconductor business.
The brokerage ascribes a 58 times multiple for the power systems business (baking in large power transformer capacity), a 55 times multiple to industrial systems, and value to the OSAT business via DCF to capture the benefits that will start accruing from FY28.
Key risks and concerns
- a slowdown in T&D capex,
- an increase in commodity
- prices,
- weak motor demand, and
- limited OSAT experience.
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