CG Power: Turbocharged for India’s Chip Future?

CG Power, with 86 years of experience and a reach across 80 countries, is now making big moves into semiconductors. Traditionally strong in logistics, energy, and industrial solutions, CG Power is setting up a ₹7,600 crore OSAT facility in Gujarat with international partners. CG holds over 92% stake in this venture, aiming to produce 1.5 crore chips a day, a mix ranging from basic ICs to high-end packages used in mobile, automotive, and AI systems. A major catalyst for this expansion is the ₹3,501 crore subsidy from India’s Semiconductor Mission. The plant will cover both older and newer chip packaging technologies, which puts CG Power at the center of India’s efforts to become a chip manufacturing base amidst global supply chain shifts. But CG Power isn’t just about chips. It has added a greenfield transformer plant in Madhya Pradesh (45 acres) and received approval to buy Renesas’s radio frequency business. These new segments boost its technological capabilities and give it opportunities for growth. Financially, CG Power posted ₹267 crore net profit for Q1 FY26, up by 11% year-on-year, and quarterly revenue of ₹2,878 crore. Its five-year trend is impressive—sales have soared from ₹2,964 crore to ₹9,909 crore, and operating profit jumped from ₹116 crore to ₹1,319 crore. However, net profit shows volatility, reflecting the challenges of large-scale, diversified operations, with sector and demand changes. Despite these positives, CG Power trades at a very high P/E of 105x, much steeper than the sector median. This signals strong market optimism but carries high risk if growth slows or profits dip. For investors, CG Power offers exposure to India’s industrial and tech transformations. Its scale and proactive entry into semiconductors make it a contender for long-term growth. Still, the high share price and profit swings mean it’s best suited for those able to handle risk and volatility, not for the cautious.