CG Power shares end higher on Q1 earnings, pact to acquire GG Tronics

CG Power & Industrial Solutions has inked definitive agreements for buying 55% stake of GG Tronics (GGT). The transaction will be carried out via a combination of purchase of equity shares from the promoters of GGT and by way of subscription to Compulsorily Convertible Preference Shares for an aggregate consideration of up to Rs 319.38 crore.

The stock of the firm closed 2.91% higher at Rs 696.30 on Wednesday against the previous close of Rs 676.60 on BSE. Market cap of the firm climbed to Rs 1.06 lakh crore.

“This acquisition is in line with CG's strategic intent to expand its Railway product portfolio by diversifying into closely related or adjacent areas poised for growth. The integration is anticipated to leverage synergies between the companies. CG's extensive expertise in manufacturing, engineering, and project management, complemented by GGT's specialized knowledge in Railway Transport Safety, particularly in the Train Collision Avoidance System 'KAVACH,' and embedded systems will enable CG to actively pursue 'KAVACH' and other Rail Safety projects, in the areas of Electronic Signalling sector through this vehicle,” said the firm.

Additionally, the heavy electrical equipment maker announced its earnings for the quarter ended  June 2024.

CG Power and Industrial Solutions posted over 18 per cent rise in consolidated net profit at Rs 241.24 crore in Q1 mainly on the back of higher revenues. Net profit in the year-ago period stood at Rs 203.84 crore. Total income rose to Rs 2,260.67 crore in the quarter from Rs 1,896.15 crore a year ago.

CG Power is engaged in the providing end-to-end solutions to utilities, industries and consumers for the management and application of electrical energy. The company offers products, services and solutions through two segments: Power Systems and Industrial Systems. Its power systems segment includes transformers, switchgear, automation and turnkey projects. Its industrial systems segment includes electric motors, alternators, drives, traction electronics and supervisory control and data acquisition systems (SCADA).