Semiconductor stock, share under Rs 600: 650% RETURNS in 3 years! BUY, SELL, or HOLD?
semiconductor stock, share under rs 600: 650% returns in 3 years! buy, sell, or hold cg power?
Semiconductor Stock, Share Under Rs 600: Murugappa Group company CG Power and Industrial Solutions is set to announce its earnings for the quarter and year ended March 31, 2024 tomorrow, Monday, May 6. The midcap stock, having a market cap of Rs 83,697.86 crore, has rallied over 650 per cent in the last three years, multiplying investors money more than seven times.
Semiconductor Stock: CG Power
The company early this year in March kicked off the construction work for its Rs 7,000 crore Outsourced Semiconductor Assembly and Test (OSAT) facility in Gujarat. The company has formed a subsidiary, CG Semi Private Ltd, for the above joint venture (JV) project. The JV project is in partnership with Renesas Electronics Corporation and Stars Microelectronics (Thailand) Public Co. Ltd.
Semiconductors are always in demand, and especially with the rise of AI and 5G technologies, the demand is further anticipated to increase. Indian government is also taking several measures to boost semiconductor manufacturing in India.
According to an April 29 report by the Times of India (TOI), the Indian government is working on a huge new economic package for semiconductor sector in addition to the previously allocated Rs 76,000 crore in incentives. Launched in December 2021, the Rs 76,000 crore incentive package aimed to support companies engaged in semiconductor manufacturing and investment. However, this amount has nearly been depleted, prompting the need for further support for India’s semiconductor initiative. The upcoming package is expected to surpass the previous one in size and will likely be announced once a new government assumes office, the TOI report added.
For investors, this makes the semiconductor sector in India not just exciting, but full of potential for growth and adds one more sector to diversify their equity investments.
CG Power Share Price Target 2024
An ET NOW Swadesh panelist and market expert Girish Sodani is bullish on CG Power and has recommended investors to buy the stock for a potential upside of up to 10 per cent from the current market price.
In an exclusive episode of ET NOW Swadesh, Sodani shared that CG Power works in three verticals – one is Railways, second one is power systems, and the third one is semiconductors, which is not yet operational.
According to the market expert, the company’s order book looks good, with Railways segment constituting Rs 1,092 crore and power systems constituting Rs 3,500 crore.
“The company is aggressively working on its Semiconductor vertical, and it has already garnered Rs 10,000 crore worth inquiry books. The company has worked well to improve its profit margins, with 37 per cent profit growth YoY. Its operating profit margin (OPM) is around 12-14 per cent, whereas the industry’s OPM is around 8.5 per cent,” said the expert.
Sodani recommended to buy CG Power shares for a target of Rs 600 with an investment horizon of six months.
CG Power Share Price
Shares of CG Power closed at Rs 548.20 apiece on NSE on Friday. During the session, the stock touched an intraday high of Rs 556.15 and an intraday low of Rs 546.05.
At the current market price, the stock is trading above its 20-day, 50-day, 100-day, and 200-day exponential moving averages (EMAs). Its Relative Strength Index (RSI) is trending at 63.34 on daily charts. Typically, an RSI below 30 is considered underbought, and an RSI above 70 is considered overbought.
CG Power Share Price History
CG Power is a constituent of S&P BSE 200 and its shares, according to BSE Analytics, have appreciated 22 per cent so far in 2024. In the past six months, one year, and three years, the semiconductor stock has delivered returns of 44 per cent, 75.6 per cent, and a whopping 650 per cent, respectively. Looking back further, the stock has generated returns of 1391 per cent for its shareholders in the past five years.
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