CG Power and Industrial Solutions, part of the Murugappa Group, will invest about ₹347 crore including its ongoing project, in capacity expansion of its various units. With a new order intake of ₹2,232 crore in Q2 of this fiscal, the company carried a healthy order book (unexecuted) of ₹5,229 crore as of September 30, 2023.

CG Power will spend about ₹155 crore to expand the manufacturing capacity of instrument transformers and condenser bushings, medium voltage switchgear, and GIS units at its Switchgears Division complex in Nashik. The expansion is being taken up in view of the growing market demand, according to a company statement.

The company has also planned to expand the manufacturing capacity of large industrial machine (LIM) units at Mandideep, Bhopal, at a capital outlay of ₹35 crore. The proposed expansion will increase the capacity of LIM up to 1,728 units per annum from 1,002 units per annum now. The current capacity utilisation is around 98 per cent.

This expansion project, which is being taken up considering the expected increase in future demand for MV Motors, will be implemented over 12 months.

The company will further expand the capacity of power transformers (T3 unit) at Bhopal at an investment of ₹31 crore. The proposed expansion will increase the capacity from 25,000 MVA to 35,000 MVA for power transformers. The current capacity utilisation level is 75 per cent.

This is expected to be implemented within 15 months, along with the earlier ₹126-crore project, which was announced in January this year, and is being executed for power transformers and distribution transformers units of the company at its plants in Malanpur and Bhopal. The expansion was to increase the capacity from 17,000 MVA to 25,000 MVA for power transformers and from 6,900 MVA to 9,900 MVA for distribution transformers.

net profit

CG Power will be funding all these expansions through internal accruals. For the quarter ended September 30, 2023, the company doubled its standalone profit after tax to ₹355 crore, against ₹178 crore in the year-ago quarter, on the back of double-digit growth in sales and margins.

Its revenue grew 20 per cent at ₹1,900 crore, against ₹1,588 crore. EBITDA also grew 20 per cent at ₹313 crore, against ₹260 crore. Margins were higher on account of execution of export orders with better margins and lower finance costs.

Meanwhile, in August 2023, CG Power and JC Flowers Asset Reconstruction Company (JCFARC), to which Yes Bank has assigned its stressed loans, entered into a settlement agreement for the pending litigations on the Company, making a payment of Rs.42 crore. JCFARC will unconditionally withdraw all the cases pending and initiated and the Company will be fully discharged from all the obligations, it said.