UBS has maintained its buy rating on CG Power and Industrial Solutions with a target price of ₹940, even as it flagged the cancellation of a key order as a notable setback for the company. The brokerage said that the order for G.G. Tronics’ Loco Kavach Systems — valued at around ₹5–6 billion — has been cancelled after prolonged approval delays stalled execution. Since the Kavach contract had a 12-month delivery timeline, the lapse in regulatory approvals effectively triggered the termination.
UBS noted that the cancellation marks a clear negative development for CG Power’s near-term revenue visibility. The brokerage said the delay-related cancellation creates downside risk to both consensus topline forecasts and its own estimates, given that the Kavach order was expected to contribute meaningfully to FY26 revenues. However, UBS added that its broader constructive stance on the company remains unchanged, supported by CG Power’s strong positioning across industrial systems, traction motors and automation solutions, as well as its balance-sheet strength and operational momentum.
Though the cancellation injects volatility in the near term, UBS believes the long-term growth drivers remain intact and that order inflows in other segments continue to provide adequate visibility.
Disclaimer: The views and recommendations above are those of UBS. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
