CG Power shares jump 4%; brokerages see further upside potential

Shares of CG Power and Industrial Solutions Ltd climbed 4.04 per cent in Wednesday's trade to hit a high of Rs 769.95. The stock was last seen trading 3.99 per cent higher at Rs 769.60, taking its one-month gains to 15.75 per cent.

Global brokerage Morgan Stanley recently initiated coverage on CG Power with an overweight rating and a target price of Rs 799. It highlighted that CG Power is "among India's most diversified capital goods players", with a strong presence in manufacturing.

The brokerage added that the company stands to benefit from robust growth in the power sector while also building capabilities in critical areas such as semiconductors and railways.

Domestic brokerage Choice Equity Broking also gave a bullish call, recommending a buy at Rs 760.5 with a target of Rs 872 and a stop loss at Rs 709.

From a technical standpoint, Choice said the stock has recently broken out of a long-term parallel channel on the weekly chart and successfully retested the breakout level, signalling renewed upward momentum. A strong bullish candle formation, coupled with higher trading volumes, indicates strong accumulation and increasing market participation, it noted.

Momentum indicators further support the positive trend. The Relative Strength Index (RSI) stands at 67.31, trending upward after a positive crossover, reflecting strengthening bullish momentum. The stock is also trading well above key moving averages, reinforcing overall positive sentiment.

Choice added that if the stock sustains above the breakout zone and decisively crosses the Rs 800 mark, it could trigger the next leg of the rally, with near-term potential to touch Rs 872.