CG Power & Industrial Solutions reported a mixed set of financial results for the second quarter, with significant revenue growth but falling short of some analyst estimates.

Revenue Growth

CG Power's revenue increased by 21% year-over-year to ₹2,922.79 crore, up from ₹2,412.69 crore in the same quarter last year. However, this fell short of the estimated ₹3,283.00 crore.

Profitability

The company's consolidated net profit rose to ₹286.72 crore, marking a 32% increase from ₹220.96 crore in the previous year's corresponding quarter. Despite the growth, it missed the estimated ₹313.00 crore.

EBITDA Performance

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) grew to ₹442.81 crore, up from ₹323.78 crore year-over-year, representing an increase of 31%. The EBITDA margin improved to 15.15% from 13.42% in the same quarter last year, slightly exceeding the estimated 13.1%.

Segment Performance

The Power Systems segment showed strong growth, while the Industrial Systems segment saw a slight decline.

Strategic Developments

1. Greenfield Switchgear Facility: The Board approved the establishment of a new Greenfield Switchgear manufacturing facility in Western India, with an estimated project cost of ₹748.20 crore. This facility aims to double the existing Switchgear manufacturing capacity.

2. Qualified Institutions Placement (QIP): During the quarter, CG Power issued 45,454,545 equity shares through a QIP, raising ₹3,000.00 crore at ₹660.00 per share.

3. Semiconductors Business: The company's subsidiary, CG Semi Private Limited, is eligible for government assistance of ₹3,501.00 crore for setting up an Outsource Semiconductor Assembly and Test (OSAT) facility.

4. Registered Office Relocation: The company plans to shift its registered office within Mumbai.

Outlook

While CG Power has shown robust revenue growth and improved profitability, the company faces challenges in meeting market expectations. The strategic investments in new manufacturing facilities and the semiconductors business indicate a focus on long-term growth and diversification.

Investors and analysts will be watching closely to see how these initiatives impact the company's performance in the coming quarters, particularly in light of the global economic uncertainties and the evolving dynamics of the power and industrial sectors.

CG Power & Industrial Solutions (CG Power) has received a request from Yanmar Coromandel Agrisolutions Private Limited (YCAS) for reclassification from 'promoter and promoter group' to 'public' category. This development comes in the wake of significant changes in YCAS's shareholding structure.

Shareholding Changes Trigger Reclassification Request

The reclassification request follows a substantial alteration in YCAS's ownership composition. Coromandel International Limited's (CIL) stake in YCAS decreased from 40% to 10.60% due to a significant fund infusion by Yanmar Asia (Singapore) Corporation Pte. Ltd. (Yanmar Singapore). On September 27, 2024, Yanmar Singapore injected Rs. 149.72 crore into YCAS, leading to the allotment of 11,09,00,741 equity shares with a face value of Rs. 10.00 each.

Regulatory Implications

As a result of this transaction, YCAS no longer meets the criteria for classification as a promoter group under the Securities and Exchange Board of India (SEBI) regulations. According to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, an entity is considered part of the promoter group if it holds 20% or more of the equity share capital. With CIL's stake now below this threshold, YCAS falls outside this definition.

Current Shareholding and Control

It's noteworthy that YCAS currently holds zero shares in CG Power. In its request, YCAS has confirmed that it does not exercise any control over CG Power's affairs, lacks special rights or board representation, and has no access to price-sensitive information about the company.

Next Steps in the Reclassification Process

The reclassification request, dated September 16, 2025, will be presented to CG Power's Board of Directors for consideration, as mandated by Regulation 31A of the SEBI Listing Regulations. Following board approval, CG Power will submit an application to the National Stock Exchange of India Limited and BSE Limited, seeking their no-objection to the proposed reclassification.

Regulatory Compliance

In compliance with SEBI regulations, YCAS has provided necessary confirmations, including:

• Neither YCAS nor any related persons hold more than 10% of CG Power's total voting rights
• They do not exercise direct or indirect control over the company's affairs
• They have no special rights through formal or informal arrangements
• They are not represented on the board and do not act as key managerial personnel
• They are not classified as willful defaulters or fugitive economic offenders

Implications for CG Power

This reclassification, if approved, will alter CG Power's shareholding structure, potentially impacting the company's regulatory obligations and public perception. However, given YCAS's current zero shareholding in CG Power, the immediate practical impact on the company's operations is likely to be minimal.

The market will be watching closely as this reclassification process unfolds, particularly for any implications it may have on CG Power's governance structure and future strategic directions.