Multibagger stock with 1,089% returns trading near 52-week high, more upside likely?

Multibagger stock: Shares of CG Power, which have surged 1,089% in five years, are set for another 16% upside in the next one year. The engineering conglomerate specialising in power and industrial systems has received a buy call from brokerage Motilal Oswal for a price target of Rs 900. Interestingly, the Multibagger stock hit a 52-week high of Rs 819.50 in the previous trading session. Market cap of the firm stood at Rs 1.26 lakh crore.The stock is overbought on charts with a RSI of 70.6. The stock delivered 1089% returns in five years and 1244% returns in ten years. 

Motilal Oswal cited expanding capital expenditure, growing order books, and an increasing share of high-voltage direct current (HVDC) projects.

The brokerage noted that alongside growing domestic demand, there has been a significant uptick in transformer demand across international markets. This surge is largely fueled by several factors, including the integration of renewable energy, expansion of data centres, industrial electrification, the development of electric vehicle (EV) charging infrastructure, and the pressing need to upgrade aging facilities.

As a result, there has been a greater dependence on imports and an increase in transformer prices. However, domestic manufacturers are poised to take advantage of this favourable situation.

Subsequently, the brokerage has identified firms that are are benefiting from incremental capex, revenue growth, and margin improvement. It pojects them to continue reporting strong earnings growth over FY25–28.

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).