CG Power posts 78% Q2 order surge to ₹8,485Cr

CG Power reported a 78% YoY surge in Q2 order inflows to ₹8,485 crore, lifting its unexecuted backlog to ₹23,646 crore. This includes a ₹433 crore Kavach railway safety order won by its subsidiary, GG Tronics India. The order intake acceleration drove a 30% YoY revenue jump to ₹3,802 crore and a 44% PAT expansion to ₹284 crore. This matters because it validates the company's dual-engine growth in power transmission and railway safety signaling. I am watching the Q3 FY27 earnings call in January 2027 for the billing conversion rate of the Kavach mandate and the sequential margin expansion in the EHV transformer segment. The market currently prices CG Power purely on broad electrical capital goods cycles, fixated on raw material cost volatility. What the consensus misses is the structural margin premium embedded in this specific order mix. Step one: the ₹433 crore Kavach order provides sticky, high-margin railway safety signaling revenue, which is less cyclical than standard industrial capex. Step two: a ₹23,646 crore backlog provides multi-year revenue visibility, allowing the company to optimize supply chain procurement and lock in better component pricing. Step three: the 44% PAT growth outpacing 30% revenue growth proves operating leverage is actively expanding. The market misprices this as a standard volume play, ignoring the deliberate pivot toward high-ROCE, specialized infrastructure assets. Accumulate for long-term margin and order book expansion. Disclosure: I do not hold positions in this stock. This is for educational purposes only and does not constitute investment advice.