Ladies and gentlemen, good day, and welcome to the CG Power and Industrial Solutions Limited Q2 FY 25 earnings conference call, hosted by IIFL Securities Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Akshit Gangwal from IIFL Securities Limited. Thank you, and over to you, sir.
Thank you, Sejal. Good afternoon, everyone. On behalf of IIFL Securities, I welcome everyone to CG Power and Industrial Solutions 2Q FY 2025 earnings call. We have the pleasure of having with us the senior management team of CG Power, led by Mr. Amar Kaul , Managing Director and CEO, Mr. Susheel Todi, Chief Financial Officer, Mr. Mukul Srivastava, President, Switchgear Business.
Mr. Ajay Jain, Vice President, Transformers Division, Mr. Chidambaram Balakrishnan, Vice President, Railways Division, Mr. Indraneel Dhaneshwar, Vice President, Motors Division, and Mr. Sriram Rangarajan, Head of Consumer Product Business. Without much of a delay, I will now hand over the floor to the management for their opening remarks, which will be followed by a Q&A session. Over to you, sir.
Thank you. Thank you so much. Good afternoon, everyone, and welcome to the earnings call of CG Power and Industrial Solutions Limited. For the quarter, our sales grew year-over-year by 19%, and order backlog also remains robust, so with the backdrop of sales of INR 2,270 crores and PBT of INR 298 crores, adjusted PBT at INR 344 crores achieved during Q2 FY 2025, is highest ever for the Q2 in recent times.
Showing growth of 19% year-over-year and 8% versus previous quarter. Now, PBT was higher at INR 298 crores, as against INR 293 crores in quarter two of last year. PBT percentage was lower at 13.1% of sales, and that's primarily because of strategic expenses that we had amounting to upwards of INR 36 crores on acquisition expenses to our strategic initiatives.
If we look at the adjusted PBT margin, it would have been around 14.7%. A bit of impact for the mix change, which is skewed a bit towards the railway business, that also was an impact there. Free cash flow generated for the quarter was INR 227 crores. So FCF to PAT was at 102%, and return on capital employed quarter-to-quarter was at 33%.
Order intake was at INR 3,996 crores, which is 43% growth year-over-year, and our unexecuted order backlog swelled at INR 7,831 crores, which is 50% higher year-over-year. If I go to the segment performance, starting with Industrial Systems, aggregate sales for the quarter was higher at INR 1,425 crores, which is about 11% growth year-over-year, and PBIT was at INR 166 crores at 11.6%, as against INR 207 crores.
A gain, the strategic expenses that I talked about, a major portion came from the industrial business for the future growth in the industrial segment as well. Margins were lower, because of, you know, the strategic expenses and of course, as I said, a bit of mix change, more towards skewed towards the railway business.
Order intake for the quarter was INR 1,732 crores, which is 56% growth year-over-year a nd unexecuted order backlog at the end of the quarter was INR 2,700 crores, which is 45% higher year-over-year. Aggregate sales for the quarter was... I'm jumping now to the power system after industrial. So the aggregate sales for the quarter was at INR 846 crores, which showed a growth of 37% year-over-year. PBIT at INR 149 crores, which is 17.6% of sales versus INR 103 crores in Q2 last year.
The margins are higher on account of operating leverage, the OpEx activity that we have, and of course, the cost efficiencies. Order intake for the quarter was at INR 1,463 crores, which is 31% growth year-over-year. Unexecuted order backlog at the end of the quarter was INR 5,131 crores, which is 53% higher year-over-year.
If I look at the consolidated results, which includes the performance of operating subsidiaries at Sweden, Germany, Netherlands, Drives and Automation, CG Adhesives Products , India, CG Semi Private Limited, GG Tronics, and other non-operating and holding subsidiaries. Aggregate sales for the quarter was up at INR 2,413 crores, a growth of 21%. PBT was at INR 294 crores, which is 12.2% of sales.
Free cash flow generated for the quarter was INR 243 crores, and the percentage to PAT was 102%. Return on capital employed annualized at the end of the quarter was 32%. Order intake was INR 3,302 crores, which is 42% growth, and unexecuted order backlog at the end of the quarter was INR 7,965 crores, which is 48% up.
Some key events, milestone that I would like to mention in Q2. First of all, the company completed the acquisition of G.G. Tronics India Private Limited, with 55% equity stake at an aggregate consideration of INR 319 crores.
The good news is, GGT already received a development order for INR 4 crore, approximately, for the TCAS, which is we call also Kavach system, which is train collision avoidance system. The same needs to be completed in next 9-10 months, and more to come.
Also, the company has entered into a definitive agreement with radio frequency components business of Renesas, marking its foray into semiconductor design at the consideration of about $36 million. This business will be acquired by entities that will be established by the company post-completion of customary conditions that are applicable to regulatory approvals.
Further to our earlier capacity expansion for the power business from 225,000 MVA to 35,000 MVA in October 2023, today, the board of directors also approved additional capacity expansion for power transformers at an additional investment of INR 27 crore for additional 5,000 MVA capacity, which would increase the total capacity to about 40,000 MVA.
T his expansion is proposed considering the expected increase in demand for the transformers and expected to be implemented along with earlier expansion project. Unaudited financial statements with detailed notes are available as part of stock exchange filing and in the company website as well. Thank you. Back to you.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two.
Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Subhadip Mitra from Nuvama. Please go ahead.
First question is with regard to the railway margins. You did mention in your opening comments that there is some weakness in the margins because of railways. So how long do you expect to see the industrial segment being impacted by these margins? And do you see a potential recovery, going ahead?
Yeah, thanks. Very, very good question. So it's in a transitional phase that, you know, especially in our railway business, especially in India, goes by the tender, even if you are quoted on the higher side, but whosoever is the L1, L2 and L3 is supposed to match the figures with that, and that's have some impact on the margin erosion. Now, that's one side of the story. Now, how do we recover out of that?
So recovery out of that is twofold on the industrial piece of business, especially for railways. Actually, if you look at the, the big ticket item, we are focusing also on exports for railways, and the first milestone is already crossed.
We recently received AAR, which is Association of American Railroads certification, successfully, which was detailed audit, which means the doors are open for CG for the U.S. market for this business. So that, you know, so CG is considered as a bulk supplier to U.S. for Class I Railroad and for traction machines. So that's one step in that direction.
Second is especially for the motors business, which for some time has not been doing so well with the market conditions. But having said that, we have firmed up our go-to-market strategy, which means the areas that still we have the application of motors and drives and automation, we are venturing into those areas with the go-to-market strategy. We also focus on the operational excellence piece of it. So that becomes our vehicle to make sure we are driving that business to overcome this short-term impact.
So, should we expect a recovery in these margins in third quarter or fourth quarter, or will we be a little bit more proactive?
It takes a bit of time. We cannot say exactly which quarter, but again, you know, fundamentally, we are making this company stronger by having the right strategy and execution, because that's the vehicle for us to develop and, grow.
Understood. Second question is with regard to the railway propulsion system offerings. I remember the last couple of calls, and even highlighted that some of these new offerings, you know, bundled with the train collision train control management system as well as anti-collision system, and the package would be, you know, available, and that should increase your overall offerings and TAM. So by when do you see that piece of the business, you know, getting pace?
Sure. I'll pass that question to my colleague, Chidambaram, who runs our railway business.
Yeah. The Kavach, right now we are at the development phase, so we get around 20% of the market share in Kavach, and we hope to get this Kavach qualified, early next year. By January, we should be a full portion coverage supplier, then I think, like the other propulsion suppliers in Train-18, we can also qualify to give coverage along with our propulsion system.
So that is the rule in Train-18, b ut for regular business at CLW and BLW, that they have not combined this together. This has to be a policy change at Indian Railways level, because if it is done, many propulsion players who have been recently approved may lose the business because coverage and propulsion together is a policy that Railways has to look at, but we are working in that direction. In Train-18, of course, it is happening that way.
Sure, sir , with regards to the Train-18 opportunity, do you see a big, you know, tender opportunity in FY 2026 for us, and how large can the opportunity be?
Train-18 is a big business. Only player there who does around 2000 plus crores of business, and we will be the second company entering that story. Our propulsion system is ready, and hopefully, by end of this fourth quarter, we should be launching our propulsion system.
Okay, thank you so much. My last question is with regard to the margins on the power segment. So, very commendable performance with very strong margins continuing, b ut do you see, you know, potential for margins leaping higher? You know, in that 18%-20% range, given that, the shortage in high voltage transformers continues, there is a ban on imports, and, you know, the export opportunity is also high. So if you could answer some of that piece of it.
So I think important is, you know, for us as the organization and the management, is focus on the top line, along with the focus on margins as well. So both will go in sync, upwards. As I talked about, we are fundamentally putting these structures and processes in place to make sure there's a laser-sharp focus on operational excellence as well as commercial excellence. So that is going to give us growth not only for power system, but across all the businesses.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow-up question, I would request you to rejoin the queue. The next question is from the line of Mahesh, from LIC Mutual Fund. Please go ahead.
Hi, sir. Thank you so much for the opportunity. Sir, EBIT margins in Industrial Systems are around 11.2% compared to 13.5%, so there is a more than 200 basis point decline. S o what is the outlook for, I think, next few quarters in terms of Industrial Systems?
I think the answer stays with the same question that I said, you know, focus on operational excellence and also the go-to-market strategy for the segments where we have not been there. We are actually going pretty strong on that as well. I f I had to talk about some of those areas where we were not present, but yes, are venturing into that is, for example, EESL, which is government-owned agency.
We are only started receiving the orders from them, where we are not engaged earlier. We are also venturing into desalination industry, especially from the southern part of India, with, again, the compressed biogas industry.
So these are the areas we are venturing as a vertical market strategy, and that's what is going to give us not only the top line, but also the bottom line. So more or less, so all the leading indicators are what we are impacting, outcome is going to definitely show up.
I mean, sir, I was asking in the context. Earlier, we had indicated that the competitive intensity is very high in the Industrial Systems side, so that was hurting our margins. So was that a reason for seeing a softness in the margin?
No, I think if you see last couple of quarters, we had an issue with, you know, because the markets are also not doing well. Motor business has been suffering, but instead of waiting for market to recover, we are venturing into, you know, get more aggressive in the markets where we can do more. Once you increase the market size, the apple pie, the pie, then you can take, you know, better share out of that, and that should be impacting our margins as well.
Sure. So last question from my end. Sir, last four quarters, our power system business has been growing by more than 30%, and recently, government has also increased the CapEx estimates for transmission. So we think, do you think, sir, over the next two, three years, we will keep growing with this kind of numbers?
As you see, it-
Ladies and gentlemen, we have lost the management connection. Please stay connected while we reconnect them. Thank you. Ladies and gentlemen, we have the management connection back on call. So please continue.
Yeah, sorry, I don't know where we left.
Okay. The next question is from the line of Ankur from HDFC Life. Please go ahead.
Yeah. Hi, sir. Good afternoon. Thanks for your time. So first question on the motor business. If I understood your remarks correctly, I think you spoke about continued weakness, even now, you know, because earlier the understanding was given elections, you know, there is some destocking with the channel.
But clearly, and correct me if I'm wrong here, but maybe the LT motor, we're still seeing some weakness. So if you would just help us, you know, both LT, HT, how are you seeing demand, you know, kind of, and then when you really see demand kind of come back, if it's not as strong as you expected?
The question is, you know, two , one is waiting for the market demand to come back. Second is what can we do about it? S ome of the examples I gave in the previous to the previous question, I'm not sure if we got disconnected before that or not, is we are opening up into different segments also where our presence was not that strong.
Starting with the, you know, desalination industry, to EESL order, which is more on the energy efficiency sector, then ethanol sector, by collaborating with the EPCs, and also localizing and developing products under Atmanirbhar Bharat, and that is where we are getting stronger in to open up more doors for us.
So that's something which will actually help us to overcome any spikes which are coming, you know, from the market sentiments or election or any of those things. So you'll see some progress in forthcoming months and quarters.
This weakness is in both LT and HT, is that correct? Or is it more dealer-driven, LT motor-driven?
So LT is primarily because, you know, LT gets impacted more because we are on the higher market share there, right? So when you are the, on the higher market share, anything happening in the market, you are the first one to catch the ball.
So that's where, that's one impact area. Second is also on the large industrial motors, then of course, we are expanding on the capacity portion as well, and market is available there, so we are venturing into those areas too.
Thank you. The next question is from the line of Jonas Bhutta from Birla Mutual Fund. Please go ahead.
Thank you for the opportunity. Two quick questions. Firstly, if you can update us on the status of the capacity expansions, when do they go live for both motors, transformers, switchgears? C o-joined to that is basically what drove industrial segment order inflow in Q2. Was it motor heavy or railway heavy?
T he last bit is on the strategy for the company and for exports, particularly motors and transformers. A lso, I think you also had expansion plans for a strategy for industrial drives, if you can cover all of this, helpful.
Yeah, I think that's a very good question. So on the power side, the transformer capacity expansion that we had planned for earlier, that should be done in the next two quarters, which means, March of next year, we should be able to complete that.
I n addition to, you know, we already increased our further INR 27 crores, that the board approved today. So we keep expanding in that area because we can see the demand there. Switchgear is going to take a bit more time, so probably about a year or so from now, because that work is underway, and we are looking at further opportunities to invest more into those areas. Motor capacity expansion is in progress. That is developing, machines are coming, the plant expansion is happening, so it will take about a year or so more.
Yes, sure.
The next question is from the line of Pranav from Canara Robeco Mutual Fund. Please go ahead.
Hello?
Yes, sir, you're on the line.
Yeah, hi. Good evening. So I understand there is a one-off of about INR 36 odd crores as regards the strategic initiatives and consultancy fees in the numbers. On a segmental basis, where have they been accounted for? Are they part of industrial systems or power systems?
It's a combination of both, but primarily on the industrial side.
So if I have to understand then, the margins of the industrial, whatever is reported, should be intuitively higher than what-
Oh, yeah, absolutely, absolutely. That's why I say I'm not really worried about, you know, the reduced margin, because these are more strategic decisions that are there, to fuel, fuel our growth for future. So, so, so I'm, I'm absolutely not.
Sure. Thank you.
Thank you. The next question is from the line of Bhoomika Nair from DAM Capital. Please go ahead.
Yeah, so just want to understand a little better on, you know, the Renesas acquisition that we did. What is the rationale? What kind of growth path do we look at a nd, you know, what are the kind of margins at stake, and how does it fit into an entire semiconductor strategy with the upcoming OSAT, and what is the status on OSAT?
So one, Renesas, second, OSAT, and lastly, if I may just squeeze in on the QIP that you've announced about INR 3,500 crores. Given that we have INR 1,500 crores, what is really driving this QIP, or what areas of CapEx are we really looking at? So if you can just highlight these three points.
Sure, good. I'll do that. Although these are three questions, but that's fine. So I'll try to answer one by one. So first, on the OSAT piece, that you already know the work is going on there. The construction is in full swing for the pilot project there. But as you know, this takes a bit of time.
Leadership team is in place, so that work is continuing, which is more from testing production assembly of the business. T he logic of RFC business, which is radio frequency from Renesas, was more to bring in the design capability, because that's what we want to bring into the country, not only assembly and testing.
So this is a first step in this direction, to get our arms around this segment, and which is typically into two strength areas, which is wireless communication and then SATCOM. So these are the two areas, so we'll build our own capability in that.
T hird question of yours on QIP is more basis you see these acquisitions that are happening, and then I talked about our growth and expansion plans, so we'll definitely in spite of generating cash, we will still need more and more money, and that is the logic why we need this surplus cash in the account.
Thank you. The next question is from the line of Amit Mahajan from UBS. Please go ahead.
Hi, Amit. Congratulations on this new role. So two quick questions. First is on the fundraise of INR 35 billion. Broadly, is it more that we are looking at team expansion in the rail portfolio again, or is it more industrial? Any color here is helpful. S econd question is more about your global acceptance for motors and what Jonas was also trying to ask about, what we'll be doing drives, b ecause taking MNCs head-on on selling motors with drives is not gonna be easy. So these two areas, please. Thank you.
Sure. So, so one is, you know, as I said, the expansion is, the potential advantage that we have, you know, a design capability with, Renesas that we are planning to buy. So that's where we have commitment. CG Semi has, a lot of expansion plans, so we need to have a commitment into those areas.
Then our own main business, which is therefore, CG Power and Industrial, with the demand that we are seeing and the go-to-market strategy that we have, we'll keep investing and plowing money back into this area.
So that will include not only capacity expansion, but also innovation, and that's what you'll see more and more progress on. That indigenously developed products, which should be the best in the industry in terms of, energy efficiency, in terms of utility and value for the customers.
Thank you. The next question is from the line of Rahul Gajare from Haitong International Securities. Please go ahead.
Yeah. Hi, thanks for the opportunity. You know, I want to dwell on this industrial business. You know, you did indicate in your opening remarks that it is basically the railways which is dragging down the margin. I want to understand in your overall revenue that you booked in this particular quarter, how much is revenue from railways and how much is, you know, the other industrial area? That is one.
G iven that, you know, you had indicated earlier, you know, that you have large order book of railways, so does that mean that, you know, the profitability or the margin of industrial business will continue to remain low at these levels? I think that's my first question.
Okay. So no, the answer is that will it keep bleeding? The answer is no, a nd that's what our job is, to make sure that in spite of. Let's talk about railway business, which is a tendering business, and you have to match the price to accept it finally.
But having said that, there are productivity areas that we are working on, and that's why I mentioned in the beginning, the operational excellence is one of the vehicles for us to get better every day a nd that's what we are practicing, you know, that journey is already started, and that's going to give us some results to overcome that gap, number one.
Number two is, it's not only railway business that will impact the whole sequence. You know, we have the other businesses also in the pipeline, and everybody has to stand it on its own legs. Of course, the percentage of growth will vary from business to business, but everybody has to, you know, come up to above those numbers.
You know, but, sir, I think, for quite some time, we are seeing sluggishness in the demand for motors, you know, whether it is volume growth or price decline. Can you throw some light on how was the volume growth on the motor side, along with, you know, if there is any price variation, price movement, that you've seen in this particular quarter?
So I maybe you didn't hear me. There was a similar question before as well, where I talked about the motor business. Of course, when we talk about LT business, we are fairly strong, we are number one in the market share today. Now, anything that changes there will impact us. Having said that, how do we expand the portfolio of that business?
T hat's why, as part of our go-to-market strategy, we are venturing into the areas or the verticals where we have not been before a nd to, I'm repeating for you, for example, EESL, we already received what? Almost INR 8 crores worth of order. Another couple of more in the same sequence are also in the pipeline. Desalination is a big area that is coming up, and we are tying up with the original equipment manufacturers. Again, there are some good successes that have come in there.
Then there's compressed biogas industry, which is coming up there. Plus, we are also partnering with some large customers as one product solution company, you know, not only for motors, because the moment you start going higher on the motor size, you know, you complement it with the drive along with it, because energy efficiency becomes the key for everybody. So putting a variable frequency drive along with the motor and selling as a solution instead of just a commodity is what will differentiate us in the market.
Yeah, so the price, so, you know, my limited point was, you know, the price decline that we had seen earlier in motors, that is that stopped or are we still seeing pressure on the pricing?
No, that's over. That's history.
Okay. Fine. Thank you very much.
Thank you. The next question is from the line of Alok Ranjan from 360 AMC. Please go ahead. Mr. Alok, I would request you to unmute your line and speak, please.
Yeah, hi. Thanks for the opportunity. Sir, two questions. First is, we were targeting meaningful revenue-
Sir, I would request you to please use your handset.
Is it better now?
Yes.
Yeah. So two questions from my side. First is, we were targeting meaningful revenue from the motors expansion from FY 25. So just wanted to get an update, whether any delays there in terms of the capacity expansion.
S econd question is, in terms of semi design, you know, you mentioned that we will be targeting wireless communication and SATCOM. So whether this design transfer is pertaining to these two segments, or the capability can be leveraged to other segments also where the semi is used, like automotive, consumer, and other segments?
So once this, you know, once the transaction is completed, which will take some time, so this becomes our company. One is to localize and make sure that we have in-house technology for this particular business, and then we'll also look at the synergies between our businesses.
For example, G.G. Tronics, which we brought, you know, the kind of know-how we have or the design capability, that actually matches very closely with the segment that is there. So we'll keep building on this electronics design, PLC-based equipment together on this. So there'll be, of course, a lot of synergies. So it's our company, then we can keep developing on that.
S o the first question was on the capacity expansion that we had highlighted in January 2023, about, you know, the incremental revenue that we'll get from the motors expansion. So any delay that we are expecting, the incremental revenue contribution from the expansion project in motors?
So we are balancing that. Yes, that's a good question. So we are balancing capacity expansion with the pull from the market also, and the pull from the market is not the natural pull. It's basically what we are trying as per go-to-market.
That's why I keep mentioning these two statements, is investing the capital for the expansion and also making sure there's a pull on the orders, which includes exports as well, and you, you'll keep hearing from us every quarter, the progress we are making in these two areas.
S o, just last, a follow-up. In terms of the frequency, which is used in wireless communication and SATCOM, I think the kind of the frequency, switching frequency used is very different. So is it a very wide spectrum of frequency design that we will get with this deal, or how we should think about it?
No, this is actually limited on, you know, for example, for wireless and satellite communication, it includes, you know, typically for the aircrafts, for example, the entertainment system that you see in the aircraft, so it will be limited to that area. So generally, they call it, in satellite communication, they call it LEO, which is low earth orbit, broadband constellation communication. So these are the areas that we will be into.
Thank you. The next question is from the line of Aditya from Kotak Securities. Please go ahead.
Thank you for the opportunity. My question was more focused on an earlier question, which I think was unanswered, on the strength of the order inflows in the power and the industrial systems business, more importantly on industrial systems, because it seems that you are highlighting that capacity expansion has been delayed, but book footprint is extremely strong. So which areas are firing and how sustainable it is?
Your question is related to industrial or for power?
More on the industrial part, but you've given a good print on both aspects of orders inflows. If you could comment on the strength, where it is coming from and the sustainability of it, yeah.
Yeah, that's why I said, I think I repeated that two times already. In the new areas or the segments, the verticals that we are targeting, where we were not present, that's number one. Number two is also plugging the two things together.
Instead of being a commodity-driven kind of thing, just sell the motor, we are actually complementing it with the drive business that we have, because both put together, especially when you go into the larger sizes, makes it much more energy efficient, especially the customers who needs a variable frequency drive.
Along with that, it makes a lot of sense for the customers to buy from us as one solution instead of them going to different. So more and more focus on value selling rather than commoditizing our product. That's the way our go-to-market is going on.
Understood. Just a second question on my side. As you have spoken about semiconductors, a little bit color would be more useful as to, let's say, over the medium term, how does CG Power want to be associated with the value chain of semiconductors?
You've started talking about OSAT and design, but m aybe more medium term, how do you think through CG Power's positioning and gamut of services and product will be offering in this domain?
So these are what I don't know how you define medium term, but yes, semiconductor is a large investment and something this will show up because we are in this business for a long term.
You know, we are not looking at overnight growth or just make the profits and go out, you know. This is a long-term journey that we have, and that's why these areas of investment that we are making are strategic and long-term investments. I t doesn't mean that it won't give the results. Yes, it will give the results the moment it gets productionized as per the schedule.
Thank you.
Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead.
Thank you very much for the opportunity, sir. So just a small bookkeeping question first. How has been the orders and sales for the railways business in the first half of FY 20 25? So if you could give some quantum on that, that will be very helpful. Also, are we on track to propose a 40% revenue growth in FY 2025 in the railways business, as it was communicated earlier?
See, the point is, so we generally have given only two segments, which is industrial and power, and we don't give the details about each of the businesses, so apologies for that.
So no problem. Just a small follow-up on the motors business. How has the pricing moved from the first quarter of FY 2025 to the second quarter? Has the pricing increased substantially, especially for the LT motors? That is the last question from my side.
I would not say substantially, but yes, it is stabilized. The erosion that was there, that you had seen for a couple of quarters, as I said, that is history. S o, you know, and normally what I see, that's where we should look at.
Thank you. The next question is from the line of Rajat Agarwal from Atharva Investment Managers. Please go ahead.
Hi, good evening, sir. Just a quick question on the top line. I believe G.G. Tronics has been consolidated from first September onwards. Is that correct, a nd what is the contribution of, to the sales from G.G. Tronics for that one month of consolidation?
I'll get Sushil to answer that, our CFO.
It's almost about one and a half months. The top line is approximate around INR 20 cr +, and they are at break-even today.
I'm sorry, did you say INR 20 crores?
Yeah, top line.
Yeah. Okay. Thanks. Thanks a lot. That's all I wanted to know.
Thank you. The next question is from the line of Janak Vora from Janak Enterprise. Please go ahead.
Thank you for the opportunity. I'd like to welcome Mr. Amar Kaul to the family of CG Power and Industrial Solutions Limited, as this being your first con call, and we can see the freshness and most of the questions are answered by you. Hello?
Yeah. Thank you. Thanks for the compliment.
My first question is, as today's announcement of QIP of INR 3,500 crores, as there is already INR 3,000 crores cash on CG Power's books, so how do we propose to invest this QIP?
Yeah, so I think as you look at the cash that we have is about INR 1,300 crores, not INR 3,000 crores, a nd the commitment that you see we have right from acquisitions, investment into CG Semi, investment into Renesas, buying the radio frequency components business, the expansion plans, and it's not over, by the way.
You know, whatever expansion plans we have till now, it doesn't mean that's the end of the story. There are so much we need to still do, and we will need money for that. So it's in that anticipation, instead of getting into debt instrument, it's always better to raise money in advance when you know that you're going to need it.
Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to Mr. Akshit Gangwal from IIFL Securities Limited for closing comments.
Thank you, Sejal. On behalf of IIFL Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.