CG Power rallied after launching India’s first OSAT semiconductor facility through its JV, CG Semi, in Gujarat.
The venture will invest ₹7,600 crore in two plants, with G1 already producing chips and G2 expected by 2026.
Morgan Stanley projects 30% earnings CAGR till FY28 but flags risks from competition and execution.
Shares of CG Power and Industrial Solutions extended their winning run to the third session on September 2, gaining over 11% as investors bet on the company’s strong growth outlook. The buying action in the counter gathered momentum after the company’s subsidiary, CG Semi Private Limited, launched its first semiconductor assembly and test (OSAT) facility in Sanand, Gujarat.
With this launch, it has become India’s first full-service OSAT provider, offering solutions across both traditional and advanced packaging technologies. As per the company, its G1 facility will have a capacity of around 0.5 million units per day.CG Semi is a joint venture between CG Power, part of the Murugappa Group, and Japan’s Renesas Electronics alongside Stars Microelectronics.
The venture has pledged more than ₹7,600 crore over the next five years to establish two state-of-the-art facilities, G1 and G2, in Sanand. While G1 has already rolled out India’s first domestically made semiconductor chip, G2 is still under construction and is expected to be operational by 2026.
The announcement comes against the backdrop of India’s push to build semiconductor manufacturing capabilities and strengthen domestic production. Speaking at the inauguration of India Semicon 2025, Prime Minister Narendra Modi said the day was not far when the country would not only design chips but also emerge as a key market for the global semiconductor industry.
Modi further pointed out that as the worldwide semiconductor market heads towards the $1 trillion mark, India is well-placed to capture a significant share. He also highlighted the $18 billion already invested across 10 semiconductor plants and praised the single-window clearance system, which he said has helped speed up the journey from ‘files to factories’ and attract more global players.
Brokerage firm Morgan Stanley has taken a positive stance on CG Power, projecting 30% CAGR in earnings between FY25 and FY28, underpinned by capacity expansion, strong order flows and robust performance across its core business lines. Its established divisions including Industrial Systems and Power Systems, which span motors, drives, transformers, switchgear and consumer products are expected to benefit from solid demand trends, the brokerage believes.
At the same time, the company is diversifying into newer areas such as semiconductor chip manufacturing and railway technology. Still, Morgan Stanley cautioned that challenges remain. The firm flagged that rising competition in traditional areas such as transformers, as well as execution risks in newer ventures like semiconductors, could weigh on the outlook if not managed effectively.
