CG Power shares rise 4% as UBS hikes target price, sees 35% upside

CG Power and Industrial Solutions share price has rallied 18 percent in the last month.

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CG Power and Industrial Solutions Limited shares were trading 4 percent higher at Rs 660 apiece in morning trade on May 30 after international brokerage UBS hiked the target price on positive growth prospects.

The broking firm has assigned a new target price of Rs 850. The new price implies an upside of 35 percent from the current market levels. The previous target price set by UBS was Rs 580.

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Analysts suggest that the company is a prudent capital allocator and timely fund allocation will drive bottomline in the coming quarters. Furthermore, medium term demand drivers are in place on the back of robust capital allocation. "The company possesses best in-class profitability and significant option value," UBS said in a recent note on the company.

At about 10:10 am, shares of the company were trading at Rs 652, up 3.3 percent from the last close on the NSE. CG Power and Industrial Solutions share price has rallied 18 percent in the last month.

The company reported a standalone profit after tax of Rs 240.59 crore for the January-March 2024 quarter, marginally up from Rs 240.23 crore from the same period last year. Sequentially, the net profit witnessed an uptick as Q3 net profit was Rs 216.47 crore. For FY24, the standalone profit after tax was 28 percent higher at Rs 1,004 crore as compared to Rs 785 crore in FY23.

The company is engaged in design, manufacturing, and marketing of products related to power generation, transmission, and distribution and rail transportation.

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