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Murugappa Group stock, after 2,700% surge in five years, has more upside ahead: Morgan StanleyRising competitive intensity in the transformers business, prices and demand for motors staying low or decline even further, sluggish execution in the railways business, and OSAT business fails to pick up on execution or margins, are four key risks highlighted by Morgan Stanley for CG Power.By Hormaz Fatakia   September 1, 2025, 8:00:57 AM IST (Published)2 Min ReadBrokerage firm Morgan Stanley has initiated coverage on Murugappa Group's CG Power Ltd., with an "overweight" rating, on Monday, September 1.

Morgan Stanley has a price target of ₹799 for its base case, which implies a potential upside of 15% from Friday's close. Its "bull case" price target of ₹1,044, implies a potential upside of 50% from Friday's close.

CG Power is a strong beneficiary of the strong growth seen in India's transformer and switchgear segments, Morgan Stanley said, adding that the company also aspires to build capabilities to cater to the semiconductor and railway segments.

Shares of CG Power had risen over 5% on Friday, August 29, after the company's subsidiary launched its semiconductor assembly and testing facility in the state of Gujarat.

India's initiatives to increase the share of manufacturing in the country's GDP, will spur power demand amidst growing penetration for renewable energy, which will help reduce the country's dependence o imported energy and also improve living conditions, Morgan Stanley said.

Here are the three important facets that the stock offers, according to Morgan Stanley:

Key exposure to the manufacturing sector through its motors division, where it has a dominant market franchise and strong capacity-led growth in power systems across various segments.

Increasing its product portfolio in younger businesses like railways

Incubation of semiconductor assembly and testing facilities.

Morgan Stanley expects CG Power's earnings to grow at a Compounded Annual Growth Rate (CAGR) of 30% over financial year 2025-2028, supported by capacity addition across business segments, and increased ordering by the railways. By financial year 2028, the EBIT contribution of the power systems business is likely to increase to 57% from 48% currently, according to the brokerage.

Rising competitive intensity in the transformers business, prices and demand for motors staying low or decline even further, sluggish execution in the railways business, and OSAT business fails to pick up on execution or margins, are four key risks highlighted by Morgan Stanley for CG Power.

Out of the 13 analysts that have coverage on CG Power, 10 have a "buy" rating, while three have a "sell" recommendation.

Shares of CG Power ended Friday's session at ₹694, taking the total gains made by the stock over the last five years, in excess of 2,700%.Continue ReadingNote To ReadersDisclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsCG powerCG Power & Industrial SolutionsMurugappa Groupshare market today