CG Power & Industrial Solutions Ltd (CG) has reported higher order inflows and sales during Q4 (January to March) of FY21.
In a release, CG said that its “Power Systems” division recorded aggregate sales of Rs.282 crore during Q4 of FY21. This was 40 per cent higher, over the sequential quarter (Q3) and 155 per cent higher on a year-on-year basis.
The Power Systems division includes key electrical equipment like transformers and switchgear. The order intake of this division during Q4 of FY21 was Rs.354 crore, higher than in the same quarter of FY20. The unexecuted order book position of this division stood at Rs.1,057 crore, as of March 31, 2021.
Tube Investments of India (TI) acquired control over CG, on November 26, 2020. TI infused Rs.687.50 crore into CG and become the largest shareholder with 53.18 per cent equity holding. A new CG board was constituted under the chairmanship of Vellayan Subbiah while Natarajan Srinivasan was appointed Managing Director.
Capex
The board of CG has approved capital expenditure of Rs.135 crore to be undertaken in FY21. This amount will be financed through internal accruals. The capex will be incurred on balancing, debottlenecking and modernization of the company’s facilities, with a view to improving production and productivity.
Closure of subsidiaries
With the exception of four wholly-owned overseas subsidiaries—located in Sweden, Netherlands, Germany and USA—CG has decided to close all of its other subsidiaries. “Rest of the subsidiaries are being closed or are in the process of being wound up,” a stock exchange filing by CG said. According to information available with T&D India, as of March 31, 2020, CG had a total of 14 subsidiaries, comprising both domestic and overseas ones. Apart from the four countries mentioned above, CG had subsidiaries in Mauritius, Hungary, UK, among some others.
Ring-fencing legacy issues
The CG stock exchange filing also observed that manufacturing activities at all locations were revived thanks to providing need-based working capital, and ring-fencing manufacturing activities from “legacy” issues. Q4 of FY21 was the first quarter in recent times when plants operated with enough working capital though the full impact could not be derived for the full quarter, the filing said.
For more stories on corporate performance in FY21, click here.
Featured photograph shows an indigenously developed resin impregnated paper (RIP) bushing made by CG at its Nashik plant in Maharashtra. This product was displayed during the ELECRAMA 2018 event. RIP bushings are superior alternatives to the conventional oil impregnated paper (OIP) bushings but there are very few manufacturers of RIP bushings worldwide. CG is understood to be the first company to have manufactured RIP bushings indigenously. Bushings are integral components of transformers. (Photo: Venugopal Pillai / T&D India)