Shares of CG Power and Industrial Solutions Ltd extended their gains for fifth day on September 3 as its arm CG Semi launched a semiconductor unit and announced investing Rs 7,600 crore over five years to develop its semiconductor facilities.
Meanwhile, brokerage firm Morgan Stanley has initiated coverage on the Murugappa Group firm, with an "overweight" rating, on September 1.
On September 3, CG Power shares rose 2.5% at Rs 756.95 apiece, thus extending their five-day gains to nearly 15%. The 52-week high of the stock is Rs 874.7 and 52-week low is Rs 517.7. The market capitalisation of the stock is Rs 1.13 lakh crore.
CG Semi will invest the Rs 7,600 crore to develop two facilities – G1 and G2 – in Sanand, Gujarat, in collaboration with Renesas from Japan and Stars Microelectronics from Thailand. Also, with the launch of the G1 semiconductor facility, CG Semi became India's first full-service outsourced semiconductor assembly and tool provider. The G1 facility will operate at peak capacity of nearly half-a-million units per day.
Morgan Stanley has a price target of Rs 799 for its base case and its "bull case" price target of Rs 1,044, implies a potential upside of nearly 40% from current market price, reported CNBC-TV18.
CG Power is a strong beneficiary of the strong growth seen in India's transformer and switchgear segments, Morgan Stanley said, adding that the company also aspires to build capabilities to cater to the semiconductor and railway segments.
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