CG Power & Industrial Solutions Ltd (CG) has seen a year-on-year growth of 34 per cent in its outstanding order book position, as of December 31, 2023.
In a release, CG said that its overall outstanding order book , as of December 31, 2023, was Rs.5556 crore, as against Rs.4136 crore on the same date in 2022.
CG operates through two main segments – Industrial Systems and Power Systems. While the Power Systems division includes transformers, reactors, switchgear (circuit breakers, instrument transformers and bushings), the Industrial Systems division comprises motors and generators.
The share of the Industrial Systems segment in the outstanding order book fell to 35.7 per cent in 2023 from 44.1 per cent in 2022. (See table). On the other hand, Power Systems had a higher share of 64.3 per cent as against 55.9 per cent, by the same comparison.
It may be recalled that CG was acquired by Tube Investments of India (TI; part of Murugappa Group) on November 26, 2020.
Aggressive selling
The release observed that during Q3 (October to December) of FY24, weak demand for motors led to a price war with suppliers trying to sell their volume and retain their market share by poaching into customers. CG took a strategic call to sell equally aggressively to retain the customers and protect its turf. This had the effect of dipping the margins on the one hand and a market share gain on the other, the release said.
OSAT facility
In another development, during the quarter under review, CG filed an application with the Union Ministry of Electronics & Information Technology (MeitY), seeking approval to set up an Outsourced Semiconductor Assembly and Test (OSAT) facility and the grant of subsidy for the said project. The estimated investment on the project over a period of five years is $791million and the same is expected to be funded by a combination of subsidy, equity contribution and debt, as required, the release said.
Also read:CG Sees 47 Per Cent Growth In Q1FY24 Order Inflow