CG Power & Ind (CGPOWER)
Fast GrowerFairStock Score: 48/100 — MIXED
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹890.15 |
| Market Cap | ₹1,40,238.69 Cr |
| P/E Ratio | 112.39 |
| ROCE | 37.48% |
| ROE | 28.95% |
| Dividend Yield | 0.15% |
| Profit Growth | 13.1% |
| Debt/Equity | 0.01 |
| Sales Growth | 14% |
| Free Cash Flow | ₹376 Cr |
| Promoter Holding | 56.36% |
| 52-Week Range | ₹525.5 — ₹980.9 |
| Sector | Electrical Equipment |
| Book Value | ₹50.61 |
Strengths
- High profitability: ROE 28.95%, ROCE 37.48%
- Near-zero leverage: Debt/Equity 0.02, Altman Z-Score 11.99
- Strong growth: 5-year revenue CAGR 27.30%, latest sales growth 25.48%
- Healthy promoter holding at 56.36% and positive free cash flow of ₹376 Cr
- Piotroski F-Score 8/9 indicates sound operational health
Concerns
- Extreme valuation: P/E 102.64, P/B 34.32, far above Graham Number ₹63.71 and DCF value ₹80.64
- Profit growth of 19.35% is slower than sales growth, hinting at margin pressure
- Negligible dividend yield of 0.18% offers little downside support
- Negative margin of safety of -1038.37% leaves no room for error
AI Analysis
At ₹837.80, CG Power trades at 102.64 times earnings and 34.32 times book. That would make Graham turn in his grave. The business itself has merits: 28.95% ROE, 37.48% ROCE, negligible debt at 0.02 D/E, and a Piotroski score of 8/9. Promoters hold 56.36%, so there is skin in the game. Sales grew 25.48% and five-year revenue CAGR is 27.30%, with free cash flow of ₹376 Cr. This looks like a quality franchise in heavy electrical equipment. But what price should I pay? The Graham Number is ₹63.71; the DCF value is ₹80.64. The current price implies a negative margin of safety of over 1,000%. Even a wonderful business cannot justify an earnings multiple of 102 unless growth continues at a phenomenal pace for a very long time. Profit growth of 19.35% lags sales growth of 25.48%, and the dividend yield is negligible at 0.18%. In Buffett's terms, price is what you pay, value is what you get. Here I would be paying a wealthy price for a good company, leaving no buffer for error. If growth falters, the multiple will compress brutally. I would not buy at this level; I would wait for a margin of safety closer to the intrinsic estimate, or at least a significantly lower P/E. The F-score of 8 suggests strong balance sheet health, but the market has already priced in perfection. For an Indian retail investor, patience is better than paying 100 times earnings.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer