Avendus Spark has maintained a “Sell” rating on CG Power with a target price of ₹514, citing tepid conditions in the overall motor market, as per its latest channel checks. The stock is currently trading at ₹731, reflecting a significant downside from the target.
Key Insights:
- Motor Market Challenges: The brokerage noted weak demand across the motor market, keeping near-term growth constrained.
- Railways Outlook: The proposed pan-India locomotive production growth is likely to flatten post-FY26, following years of expansion.
- Growth Opportunities: Initiatives like Vande Bharat trains, KAVACH safety systems, and export orders might provide positive surprises.
- Execution in OSAT: The progress in outsourced semiconductor assembly and testing (OSAT) execution needs close monitoring for potential impact.
- Financial Expectations: Revenue and PAT are expected to grow by 19% and 17% CAGR, respectively, over FY25-FY27, despite the Sell rating.
Disclaimer: The above information is for informational purposes only and does not constitute financial advice. Please consult a financial advisor before making any investment decisions. Market investments carry inherent risks, and past performance is not indicative of future results.