CG Power's Semiconductor Gamble: Can A ₹7,600 Crore Bet Spark Its Next Breakout?

CG Power and Industrial Solutions gained for the fifth straight session on September 3 after its semiconductor arm, CG Semi, launched India's first full-service outsourced semiconductor assembly and test (OSAT) unit and announced a ₹7,600 crore investment plan over five years.

The company stated that the investment will be spread across two facilities, G1 and G2, located in Sanand, Gujarat, which were developed in collaboration with Japan's Renesas and Thailand's Stars Microelectronics. 

The newly launched G1 facility is designed to operate at a peak capacity of nearly half a million units per day.

Brokerage And Analyst Views

Brokerage Morgan Stanley has initiated coverage on the Murugappa Group company with an“overweight” rating, setting a base case price target of ₹799 and a bull case target of ₹1,044, implying nearly 40% upside from current levels. 

The brokerage said CG Power is already benefiting from strong demand in transformers and switchgear, while its semiconductor and railway ambitions add further growth avenues.

SEBI-registered analyst Finkhoz noted that CG Power, traditionally known for transformers and power equipment, is now pivoting toward semiconductors through CG Semi. 

He said fundamentals are improving, with sales rising from ₹1,874 crore in June 2023 to an estimated ₹2,878 crore in June 2025, while operating margins have stabilized between 13–15%. Net profit, he added, has shown healthy growth despite one-off volatility.

Technical Outlook 

On the technical front, Finkhoz highlighted that the stock reached a seven-month high this week, rising from ₹676 to ₹739 in two sessions after breaking above the ₹710 resistance level on strong volumes. 

Relative strength index (RSI) stands at 73, suggesting robust momentum but edging into overbought territory. He pegged support at ₹710, with resistance between ₹780–800, and said the breakout target could stretch to ₹820–850 if momentum holds. 

A dip back below ₹710, however, could signal a false breakout.

Finkhoz said CG Semi's OSAT launch is the biggest trigger for the stock, alongside its ₹7,600 crore capex and international partnerships. 

He assigned the stock a rating of 6.5/10, setting a target range of ₹820–850 if the breakout is sustained, while noting that the long-term upside will depend on the smooth execution of the OSAT strategy.

What Is The Retail Mood?

On Stocktwits, retail sentiment was 'bullish' amid 'high' message volume.

CG Power's stock is nearly flat so far in 2025.

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