CG Power Q1: consolidated PAT +16% to ₹308 Cr, margins slip as semiconductor losses widen

CG Power's Q1 FY27 consolidated print was steady on the surface but soft underneath. Revenue from operations rose 14.0% YoY to ₹3,280.81 Cr and reported PAT climbed 15.5% YoY to ₹308.28 Cr (₹313.01 Cr attributable to owners), with EPS at ₹1.99 versus ₹1.76 a year ago. Sequentially both lines fell — revenue -4.7% and PAT -15.2% off a seasonally strong Q4 — so the YoY comparison is the fair one. The headline PAT growth, however, was flattered by treasury income: other income jumped to ₹83.58 Cr from ₹28.25 Cr on QIP funds parked in deposits and mutual funds. Strip that out and operating EBIT (ex-other-income) grew only ~4% YoY, and operating margin compressed to ~12.1% from 13.3% a year ago and 13.6% last quarter. The margin squeeze traces to two segments. Semiconductors, where CG Semi's OSAT facility began commercial production on July 4, deepened its loss to -₹49.99 Cr (from -₹8.70 Cr YoY and -₹37.42 Cr QoQ) as the ramp absorbs cost ahead of revenue. Industrial Systems' segment result fell 20.8% YoY to ₹136.28 Cr, consistent with the LME copper spike above $13,000/t that management and analysts flagged as a Q1 input-cost headwind. Offsetting this, Power Systems remained the engine — segment profit up 43.8% YoY to ₹324.09 Cr — backed by a standalone order backlog of ~₹15,719 Cr and new EHV switchgear capacity commissioned at Nashik on June 4. The standalone-versus-consolidated gap is material and worth flagging: standalone PAT grew 27.0% YoY to ₹363.59 Cr on 15.8% revenue growth, well ahead of the consolidated +15.5%, because the loss-making semiconductor and overseas drives businesses sit in subsidiaries. Readers seeing the standalone number elsewhere should note the group figure is the lower one for that reason. Against the street, this reads as a miss on operating metrics: previews looked for mid-20s% revenue growth and a 14-15% EBITDA margin, versus the delivered ~14% growth and ~12% operating margin. Management gives no formal profit guidance on record, so there is no company outlook to score against. Alongside the results the board approved a ₹35.17 Cr brownfield expansion of the EHV GIS facility at Vilholi, Nashik — doubling capacity from 228 to a peak 600 equivalent units by FY30 (existing utilisation 91%), to be completed in 4-6 months — underscoring that capacity, not demand, is the near-term constraint in the core switchgear business.