CG Power & Industrial Solutions , a leading player in the power and industrial equipment sector, has seen its shares soar by 14% over the past four trading sessions. The stock closed at Rs 757.20 on the Bombay Stock Exchange (BSE), marking a significant rally that has caught investors' attention.

Launch of India's First End-to-End OSAT Facility

The recent surge in CG Power's stock price can be attributed to a groundbreaking development in the semiconductor industry. The company, through its subsidiary CG Semi Private Limited, has launched India's first end-to-end Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. This move positions CG Power at the forefront of India's push towards self-reliance in semiconductor manufacturing.

Substantial Investment and Job Creation

CG Power is making a substantial investment of over Rs 7,600.00 crore in two facilities, demonstrating its commitment to the semiconductor sector. These facilities are expected to create more than 5,000 jobs, contributing significantly to employment in the region. The first facility is already operational with a capacity of 0.50 million units per day, while the second facility, currently under construction, aims to reach an impressive capacity of 14.50 million units per day by 2026.

Morgan Stanley Initiates Coverage

Adding to the positive sentiment, global financial services firm Morgan Stanley has initiated coverage of CG Power with an 'Overweight' rating. The brokerage firm's analysis paints an optimistic picture for the company's future performance:

• Projected 34% profit after tax Compound Annual Growth Rate (CAGR) between FY25-FY28
• Industrials business expected to achieve:
  • 14% revenue CAGR
  • 15% EBIT (Earnings Before Interest and Taxes) CAGR
• Power systems division projected to deliver:
  • 35% revenue CAGR
  • 42% EBIT CAGR

These projections span the fiscal years 2025 to 2028, indicating strong growth potential across CG Power's business segments.

Market Impact and Future Outlook

The combination of the OSAT facility launch and positive analyst coverage has clearly resonated with investors, as evidenced by the 14% stock price increase. This rally reflects growing confidence in CG Power's strategic initiatives and its potential to capitalize on the burgeoning semiconductor market in India.

As the company continues to ramp up its semiconductor operations and strengthen its core power and industrial businesses, market observers will be keenly watching CG Power's performance in the coming quarters. The successful execution of its ambitious plans could potentially position the company as a key player in India's evolving tech manufacturing landscape.

CG Power & Industrial Solutions stock reached a seven-month high following the launch of India's first outsourced semiconductor assembly and testing (OSAT) facility by its unit, CG Semi. The company's shares continued their upward trajectory for a second consecutive session, reflecting investor optimism about this significant development in India's semiconductor industry.

Stock Performance

The stock of CG Power & Industrial Solutions demonstrated strong performance:

• Gained 4.56% over two sessions
• Rose as much as 3.69% to Rs 711.90
• Reached its highest level since January 8
• Trading volume surged to 7.6 times its 30-day average

CG Semi's OSAT Facility

CG Semi, a unit of CG Power & Industrial Solutions, has marked a milestone in India's semiconductor industry:

• Launched India's first OSAT facility in Sanand, Gujarat
• Became one of India's full-service OSAT providers
• Offers solutions across traditional and advanced packaging technologies
• Received support from both central and state governments

Strategic Collaborations and Investment Plans

CG Semi has made strategic moves to strengthen its position in the semiconductor industry:

• Collaborated with Renesas and Stars Microelectronics
• Plans to invest Rs 7,600.00 crore over five years
• Aims to develop two facilities in Sanand, Gujarat

Analyst Outlook

The market sentiment towards CG Power & Industrial Solutions remains largely positive:

The average 12-month consensus price target implies a 5.10% upside.

This development marks a significant step for CG Power & Industrial Solutions in the semiconductor industry, potentially positioning the company as a key player in India's growing technology sector.