In a classic case of “good results, expensive stock,” Kotak Institutional Equities has downgraded CG Power & Industrial Solutions to Sell — from Reduce — even as the company reported an in-line set of Q4 FY26 results and the stock surged 3.85% to a fresh 52-week high of ₹862.95 on Thursday morning. Kotak’s fair value stands at ₹620 against a current market price of ₹860 — implying a 28% downside from current levels. The market, for now, disagrees entirely.
Kotak’s note, titled “Good run continues in power; industrials yet to turn the corner,” acknowledged the positives clearly. EBITDA grew 35% year-on-year, power order inflows were up 9% YoY, the export outlook is improving, and the debottlenecking of power transformer capacities is progressing well alongside GIS approvals. The semiconductor business is also scaling well. Kotak has actually raised its estimates to account for faster capacity rollout and near-term margin uptick in power systems.
But the downgrade is a pure valuation call. Despite raising the fair value to ₹620 from ₹560 earlier — itself a 10.7% upgrade — the current market price at ₹860 is trading at a 38% premium even to the revised fair value. Kotak flagged that the industrial systems segment performance remains weak on key metrics and is yet to turn the corner, and with the sector view marked as “Cautious,” the brokerage believes the stock has run ahead of fundamentals.
The stock’s response is emphatic — a fresh 52-week high of ₹862.95, volumes of 48.26 lakh shares, and a near-balanced 51:49 buy-sell ratio suggesting active participation on both sides. CG Power’s 52-week range of ₹525.50 to ₹862.95 shows the stock has gained nearly 64% in a year. The market is clearly pricing in the power sector’s structural upcycle more aggressively than Kotak’s model warrants.