Q2FY19 result highlights
Valuations & view
The operating performance has improved led by strong traction in industrial (mkt share gains, margin expansion, etc), while domestic power business has stabilised. However, the standalone business is funding the sustained international losses (higher debt & advances being subsequently written off). Considering a weak balance sheet, delay in consummation of Hungary sale and now funding to group entity drives us to drop coverage. Our last published rating on the stock was ‘Underperformer’ with a 12-month target price of Rs65. Our estimates have not been updated for 2Q19 realities and should not be used for making any investment decision.
CG Power & Industrial Solutions is primarily engaged in manufacturing, marketing and distributing electrical products and components and provision of engineering services for power services industries, mainly in India. Co. is also engaged in manufacturing and marketing electrical and electronic equipment for industrial systems and consumer, provision of telecommunication services and investment activity. Co.'s products include transformer, switchgear, fans and appliances, luminaire, light sources, pumps, electric motors and alternators. Co. operates three primary business segments: Power System, Consumer Products and Industrial System.
IDFC Securities Ltd., a subsidiary of the Infrastructure Development Finance Company (IDFC) wherein the Government of India holds a 20% interest, is India's leading equities broker catering to most of the prominent financial institutions, both foreign and domestic investing in Indian equities. A research team of experienced and dedicated experts ensures the flow of critically investigated stock ideas and portfolio strategies for our clients. Our coverage spans across various growth sectors such as agriculture, automobiles, Consumer Goods, Technology, Healthcare, Infrastructure, Media, Power, Real Estate, Telecom, Capital Goods, Logistics, Cement amongst other sectors. Our clients value us for our strong research-led investment ideas, superior client servicing track record and exceptional execution skills.
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