Power lines hang from a transmission tower in Australia. (Photographer: Carla Gottgens/Bloomberg)

Why Brokerages Are Turning Bullish On CG Power

Brokerages Citi and Kotak Securities have turned bullish on CG Power & Industrial Ltd., the worst performer among power transmission and distribution companies, in the last one year.

Citi upgraded the counter to ‘Buy’ from ‘Sell’, citing an operational rebound. Kotak Securities upgraded the stock to ‘Buy’ from ‘Reduce’ on a change in the company’s business mix. The company’s valuations have factored in all the negatives, including a delay in the sale of its loss-making international business, making the stock an attractive bet, the two brokerages said.

The stock fell over 35 percent in the last one year compared with a 11-27 percent drop for its rivals including ABB India Ltd., Siemens India Ltd., and GE T&D India Ltd. It’s the cheapest in the category with a price-to-earnings multiple of 14—a discount of 55-60 percent to its peers.

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