CGPOWER Q2 FY27 Earnings Call: Order Intake Surges 90%, Record Revenue Up 32%

CGPOWER held its Q2 FY27 earnings call on October 23, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Quarter with Broad-Based Margin Expansion

• Record standalone revenue of Rs.3,505 Cr (+32% YoY) — highest-ever quarterly sales, with PBT of Rs.602 Cr (+47% YoY), rising to 17.2% of sales from 15.4% in Q2 FY 2025-2026; ~180 bps YoY margin expansion driven by Power Systems and Motors.
• Consolidated sales of Rs.3,802 Cr (+30% YoY) — PBT Rs.559 Cr (+44% YoY; 14.7% of sales vs 13.3%), ROCE 25%; consolidated order intake Rs.8,485 Cr (+78% YoY) and backlog Rs.23,646 Cr (+58% YoY) as of 30 September 2026.
• Rs.35 Cr (91 bps) of continued talent investment at CG Semi and Exero semiconductor subsidiaries partially offset the Power-led margin expansion in the consolidated numbers.
• Annualized ROCE of 27% on a standalone basis, underscoring profitable growth alongside the record top line.

Power Systems Inflows Surge; Export Orders Up ~200%

• Standalone order intake of Rs.8,016 Cr (+90% YoY) — unexecuted backlog of Rs.21,820 Cr as of 30 September 2026 (+61% YoY), providing multi-quarter visibility.
• Power Systems order intake of Rs.6,258 Cr (+37% YoY) — roughly double the typical Rs.3,000-3,500 Cr quarterly run rate cited by the analyst; management said the inflow is not recurring and reflects a combination of utility companies, AI, and data centers across domestic and exports, with no single material order warranting stock-exchange disclosure.
• Export order inflow grew ~200% QoQ in Q2 FY 2026-2027 — per CEO Amar Kaul; management declined to disclose the export share of intake or backlog, noting only that the domestic/export mix is moving in the desired direction.
• Power Systems backlog of Rs.18,964 Cr (+81% YoY) as of 30 September 2026; Industrial order intake Rs.1,758 Cr (+12% YoY) with backlog Rs.2,856 Cr.
• Tronics order book at Rs.1,069 Cr as of Q2 FY 2026-2027, broadly unchanged from ~Rs.1,000 Cr cited on the Q1 FY 2026-2027 call; management said the book will reduce as shipments begin, with new tenders upcoming seen as a positive.
• On sustainability, management said the "future is bright" and efforts are ongoing, contingent on no uncontrollable worldwide changes.

Sehore Greenfield Live; Roadmap Toward ~120,000 MVA

• First transformer rolled out on 4 September 2026 from the Sehore, Madhya Pradesh greenfield — India's largest transformer manufacturing facility, operational within 13 months, spread over 50+ acres, built for 220 kV to 1200 kV class with peak capacity of 35 power transformers/month; MP CM Dr. Mohan Yadav graced the occasion.
• Power transformer capacity roadmap to ~120,000 MVA — Bhopal plant moves from 65,000 MVA to 75,000 MVA via the newly announced 10,000 MVA addition, plus the 45,000 MVA greenfield (timeline unspecified); CEO Amar Kaul endorsed the ~120,000 MVA end-state with "still counting," indicating further additions remain possible (period unspecified).
• New MP plant (~10,000 MVA) expected to start "hopefully in a quarter" (≈ Q3 FY 2026-2027); the 35 units/month peak figure is a ballpark from the current order pipeline and could be 30 or 40 units depending on order mix, based on ~70,000 MVA as of Q2 FY 2026-2027.
• No skilled-labor issues at the new plant — technical staff were hired well in advance and given 6-12 months of on-the-job training at the existing plant ahead of commissioning, after 2+ years of project preparation.
• Core business capex of ~Rs.1,000 Cr in FY 2026-2027 (excluding OSAT) — Rs.550-600 Cr spent in H1 FY 2026-2027 with Rs.300-400 Cr planned in H2 FY 2026-2027; FY 2027-2028 core capex indicated at ~Rs.700-800 Cr (CFO Sushil Todi).
• Board-approved unit-level capex — Rs.300 Cr for the S1 unit (Ambade, Nashik) to lift OIP bushings/instrument transformer capacity to 11,436 equivalent units/year (production in 30-36 months); Rs.15.31 Cr for SC Unit 2 Phase 2 to add 3,600 EHV breaker units annually (6-9 months); GIS Vilholi capex raised from Rs.35.14 Cr to Rs.44.62 Cr for an 800 kV HV testing system; Rs.68 Cr for the T3 transformer facility's 10,000 MVA enhancement to 75,000 MVA (12-15 months).

CG Semi G2 Timeline Set; Exero at Break-Even

• CG Semi G2 targeting qualification from mid FY 2027-2028 — construction progressing well; qualification expected to take 2-3 quarters, with commercial production towards end of FY 2027-2028 or FY 2028-2029.
• CG Semi G1: no new customer tie-ups announced — business development continues in parallel; management noted qualification times are very high.
• Semiconductor project spend: ~Rs.2,000 Cr deployed of Rs.7,500 Cr outlay — CG has invested ~Rs.1,000 Cr to date and received ~Rs.1,000 Cr from the central government as capital support (CFO Sushil Todi); no delay flagged in either company spending or government fund receipt; the government support is netted against assets on the balance sheet.
• Exero at break-even in Q2 FY 2026-2027 — semiconductor segment revenue currently comes only from Exero; no separate OSAT-vs-Exero PBIT/EBITDA bifurcation provided.
• Tosil acquisition completed 20 August 2026 — Exero Semiconductor acquired 100% of Tosil System Private Limited for Rs.16.4 Cr, adding semiconductor and embedded engineering services (silicon design verification, physical implementation, embedded software, Linux BSP, edge AI) for global semiconductor and electronics OEMs.
• Consumer business "almost there" on break-even — some months positive, earnings reinvested into marketing; new leader Samit has joined to drive strategy, product portfolio and innovation.

Power Systems at 25%; Rail the Margin Drag

• Power Systems PBIT margin at 25% of sales (vs 20.7% in Q2 FY 2025-2026, +430 bps YoY) on strong price realization and operating leverage; management is "pretty hopeful" of maintaining or going above these margins (period unspecified), but said further gains must come from internal efficiency, not pricing, since customers have a threshold beyond which they will not go.
• Industrial sales of Rs.1,738 Cr (+25% YoY) — PBIT Rs.164 Cr (9.4% of sales vs Rs.135 Cr in Q2 FY 2025-2026), a 60 bps sequential improvement driven by Motors; margins improving at least 50-60 bps every quarter, with Motors already at double digits.
• Rail identified as the segment holding back broader double-digit margins — railway top line expected to stay flat or possibly decline as management consciously avoids chasing revenue at the expense of the bottom line; no huge railway improvements expected for a year or so (extending into FY 2027-2028) while strategy work, technology upgradation and capability building proceed.
• LT motors prices raised 30%+ over the trailing 12 months through Q2 FY 2026-2027 to track commodity inflation; no immediate further increases expected; management attributed margin improvement primarily to operational excellence, with pricing only nullifying commodity inflation.
• Motor NPD accelerated — full i3/i4 range rollout began with the 280-frame launch on 3 August 2026, with a new frame every 45 days; full portfolio upgrade expected over the next 9-12 months (into FY 2027-2028); permanent magnet and IE5-plus motors being explored to open export markets, with a new Chief Technology Officer recently joined.

No Formal Guidance; Kavach and US Qualification in Focus

• Management explicitly declined FY27 revenue guidance — CEO Amar Kaul said the company does not give forward-looking forecasts; CFO Sushil Todi confirmed "Guidance, we don't give that."
• High double-digit growth framed as an aspiration, not guidance (period unspecified) — CEO Amar Kaul invited analysts to "do the rest of the calculation backwards"; on new transformer/switchgear capacity, he did not quantify incremental revenue or contribution start timing, saying investments align with business plans for FY 2027-2028 and the company prefers to execute first.
• Kavach certification expected in Q3 FY 2026-2027 — production, installation and commissioning to follow; in a delay scenario, some Kavach orders may lapse by end of Q4 FY 2026-2027, though management said these are retendered and expected to be won back, with the only concern being additional work.
• Industrial subsidiary revenue rose ~10% in Q2 FY 2026-2027 — driven by routine business improvement, not Kavach, as Kavach execution has not started yet.
• US grid utility qualification is long-term parallel work — CEO Amar Kaul said it takes time and is not the only thing the company is banking on for the American market (no timeline or qualification count given); management did not endorse the analyst's 20% industrial growth (ex-rail) proposition over the next 12 months (into FY 2027-2028).
• Sihor facility approvals underway — fresh short-circuit testing and PGCL approvals needed case-to-case by customer and country; no bottleneck to ramp-up of the order book already placed on the new facility (commissioned during FY 2026-2027).
• GEC 3 scheme demand seen "across the board" — CFO Sushil Todi pushed back on framing that additions will skew toward intrastate 400 kV vs interstate 765 kV, saying the forward transformer mix will be "a mix of everything"; CEO Amar Kaul stated CG Power is fully equipped for the entire voltage range up to 1200 kV; 765 kV transformer orders typically carry an 18-24 month delivery lead time.