CG Power Shares Surge 4.61% Following Semiconductor Facility Launch

CG Power and Industrial Solutions experienced a notable increase in share price, rising by 4.61% to close at ₹694.60 following the launch of its first Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. The company’s market capitalization now stands at approximately ₹1.09 lakh crore, reflecting growing investor confidence in its expansion into the semiconductor sector.

The newly inaugurated G1 facility represents a significant advancement in India’s semiconductor manufacturing capabilities. With plans to establish a second facility, G2, by 2026, CG Power aims to ramp up production capacity to 14.5 million units per day. The G1 facility, which is now operational, has a peak capacity of around 500,000 units daily and encompasses all stages of semiconductor assembly, packaging, testing, and post-test services.

According to live market data from Moneycontrol, CG Power shares saw a trading range between ₹668.25 and ₹698.30 during the session, with a total trading volume of 9.6 million shares and a total traded value of approximately ₹6,665 crore. The stock’s rise comes amid a backdrop of increasing volatility; the 52-week high for CG Power shares is ₹874.70, while the 52-week low is ₹517.70.

Expanding Semiconductor Capabilities

The announcement of the OSAT facilities has generated enthusiasm among investors, as CG Power plans to invest over ₹7,600 crore (approximately $870 million) in the semiconductor sector over the next five years. This investment is seen as a critical step toward achieving technological self-reliance for India, which has historically depended on imports for its semiconductor needs.

The G1 facility is equipped with state-of-the-art manufacturing systems and a modern Manufacturing Execution System (MES) to enhance automation and traceability. Additionally, the facility is working towards obtaining ISO 9001 and IATF 16949 certifications, aiming to commence commercial production in the year 2026 upon completion of customer qualifications. The G2 facility, currently under construction, is expected to significantly increase output capacity upon its completion.

Industry experts regard CG Power’s entry into semiconductor manufacturing as a pivotal moment for India’s technological landscape. Analysts from Moneycontrol have predominantly rated CG Power shares as a “Buy,” indicating strong upside potential in light of the company’s aggressive growth strategy.

Investment Considerations

For investors, CG Power’s current price-to-earnings (P/E) ratio stands at 108.92, based on trailing twelve-month earnings per share (EPS) of ₹6.37. Despite a year-on-year decline of 33.54% in EPS, the stock continues to trade at a premium compared to the sector P/E of 82.68, reflecting optimistic market sentiment about its future growth prospects. The price-to-book (P/B) ratio is recorded at 30.99, with a modest dividend yield of 0.19%.

While CG Power shares may appear overvalued in the short term, analysts suggest that the long-term growth narrative is compelling. Investors considering CG Power should assess their risk tolerance and investment objectives, particularly as the company navigates its expansion into the semiconductor industry.

As CG Power continues to solidify its position in the semiconductor ecosystem, the focus will remain on its ability to execute its ambitious plans while adapting to market demands. The company aims to contribute significantly to India’s manufacturing landscape, ultimately enhancing its competitiveness in the global electronics supply chain.