Despite a staggering 48% rally so far in 2026, CG Power & Industrial Solutions Ltd still has plenty of fuel left in the tank. Following a recent meeting with the company’s management in Mumbai, global brokerage firm Nomura has raised its target price to Rs 1,100 (up from Rs 1,050), implying an additional 18% upside from its recent closing price of Rs 941.90.
Nomura’s bullish outlook hinges on a powerful dual engine: relentless domestic demand and a highly compelling export narrative that perfectly aligns with severe global supply constraints.
1. Capitalizing on the Global Supply Crunch
Western markets are currently facing acute supply bottlenecks just as grid modernization and data center expansions are hitting record highs. Lead times for critical electrical equipment in the US and Europe are now measured in years.
According to Nomura, CG Power is uniquely positioned at the intersection of these supply deficits and its own massive capital expenditure (capex) cycle. This allows the company to step in and capture high-value transformer and switchgear opportunities across the globe.
To meet this moment, CG Power is expanding its transformer capacity by a massive 1.7 times, taking its total capacity to 110GVA. While its current capacity is fully tied up satisfying robust Indian demand, Nomura expects that 25% to 30% of this newly expanded capacity will be dedicated entirely to exports, heavily targeting the lucrative US Power Transformer (PT) market.
2. Smart Export Tactics: Bypassing the Utility Waitlist
Entering the US utility market can be a bureaucratic bottleneck, with approvals often taking anywhere from one to three years to materialize. To bypass this, CG Power’s immediate export strategy is highly tactical:
- Focusing on Non-Utilities: The company is initially bypassing the slow utility approval process by focusing on the US non-utility segment (such as industrial applications and private infrastructure).
- Expanding Total Addressable Market (TAM): This global pivot materially scales up CG Power’s reach while providing a healthy buffer for margin stability.
- Massive Growth Projections: Driven by this strategy, Nomura expects the Power Systems (PS) segment to register an extraordinary 41% revenue Compound Annual Growth Rate (CAGR) and a 37% EBIT CAGR over the FY26–29F period.
3. Product Upgrades in Industrial Systems & Railways
Beyond power transmission, CG Power is systematically plugging product gaps and chasing higher-margin value additions across its other core business verticals.
Industrial Systems (IS)
The company is aggressively working on in-house research and development to lean into value-added products. Management is focused on expanding its market share in high-efficiency motors and is gearing up to launch multiple new electronic drives to round out its portfolio.
Railways
Instead of just relying on hardware sales, CG Power is pivoting toward a higher-margin service revenue model for its existing product lines, such as traction motors. Concurrently, it is developing new rail technologies which management anticipates will begin contributing to top-line growth within a few quarters.
4. Financial Outlook & Forecasts
Recognizing the higher margins associated with a stronger export mix, Nomura has upgraded its financial estimates for the electrical engineering giant.
The brokerage has raised CG Power’s FY28F and FY29F Earnings Per Share (EPS) estimates by 4% and 5% respectively. Looking at the medium-term horizon, Nomura forecasts a robust 33% EPS CAGR over FY26–29F, driven by the expectation that exports will gradually account for a quarter (25%) of all Power Systems order inflows by FY29F.
With structural tailwinds at its back and an aggressive, well-timed capacity expansion underway, CG Power appears remarkably well-positioned to transform from a domestic leader into a critical player on the global energy transition stage.