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CG Power mulls ₹126-cr. expansion of transformers production at Malanpur and Bhopal units

Company reports 63% rise in Q3 net profit; decision to expand capacity stems from anticipated increase in demand for transformers

January 24, 2023 08:22 pm | Updated January 26, 2023 10:15 am IST - CHENNAI

Murugappa group company CG Power and Industrial Solutions Ltd., (CGPISL) said it would enhance the manufacturing capacity of its Power Transformers and Distribution Transformers units at Malanpur and Bhopal at an investment of ₹126 crore.

The proposed expansion would raise the capacity from 17,000 MVA to 25,000 MVA for the power transformer unit, and from 6,900 MVA to 9,900 MVA for distribution transformers, the company said in a regulatory filing.

The current capacity utilisation is about 65%. The expansion project is expected to be implemented within 15 months and will be funded via internal accruals.

The expansion had been proposed considering the expected increase in demand for transformers, said the TI subsidiary.

During the third quarter ended December, CGPISL reported a 63% increase in standalone net profit (excluding exceptional items) to ₹192 crore. It attributed the rise to better price realisations, higher volumes, favourable product mix, moderation in input costs and procurement efficiencies.

The company reported exceptional items of ₹51 crore pertaining to reversal of excess provision towards settlement of corporate guarantee obligation and litigation expenses, compared with ₹242 crore for the year-earlier period towards profit on sale of land and reversal of certain provisions.

Revenue from operations grew 14% to ₹1,645 crore. It generated free cash flow of ₹202 crore and repaid non-convertible debentures of ₹200 crore and thus became a zero-debt firm.

The order intake rose 21% to ₹2,219 crore and it said it had an unexecuted order book of ₹4,136 crore, clocking an increase of 34%.

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