Energy Solutions Provider CG Power on October 21 reported a 8.8 percent YOY drop in consolidated net profit amid surge in the cost of raw material expenses. The company booked profit of Rs 220.96 crore in the second quarter ended September 30 versus Rs 242.20 crore in the same quarter last year.
Meanwhile, its quarterly revenue from operations rose 20 percent to Rs 2,412.7 crore on the back of healthy sales of its motors, transformers, automation systems and smart grid solutions. On a standalone basis, net profit dropped 37 percent to Rs 222.6 crore versus Rs 355.2 crore. The year-over-year impact on profit was due to an exceptional gain of Rs 142 crore recorded in the previous year’s quarter.
Additionally, the company's board has approved raising up to Rs 3,500 crore via issue of equity shares in a qualified institutional placement (QIP). The company will issue securities in one or more tranches in accordance with Chapter VI of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, and other applicable laws, CG Power said in a stock exchange filing.
This capital raise is aimed at supporting CG Power’s growth and operational plans, with the exact number of securities to be determined at a later stage, CG Power said in a regulatory filing.
Sales from power systems rose 36 percent to Rs 845.7 crore while sales from industrial systems jumped 11 percent. Raw materials expenses in the quarter jumped 25 percent to Rs 1,640.1 crore.
Separately, the company's board approved an additional investment of approximately Rs 27 crore to expand Power Transformer capacity by 5,000 MVA (mega volt-amperes), bringing the total capacity to 40,000 MVA. This expansion is aligned with the expected rise in transformer demand and will be implemented alongside the ongoing expansion project, the company added.
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