3:4 Bonus Issue: CG Power Subsidiary Bags Rs 600 Crore 'KAVACH' Order From Chittaranjan Locomotive; BUY?

GG Tronics India Pvt Ltd, a Bengaluru-based subsidiary of the Murugappa Group-owned CG Power and Industrial Solutions Ltd., has secured a significant order for the "KAVACH" Automatic Train Protection System. The order was placed by Chittaranjan Locomotive Works, a unit of the Government of India based in West Bengal.

Scope of the Project

The contract includes the supply, installation, testing, and commissioning of onboard KAVACH equipment, adhering to specifications outlined by the Research Designs and Standards Organisation (RDSO). Additionally, the agreement covers annual maintenance of the system for a period of 11 years.

According to CG Power's exchange filing on Wednesday, November 27, the order also entails complete wiring, harnessing, cabling, and connection with the locomotive's KAVACH system. The project is valued between Rs 500 crore and Rs 600 crore and is slated for execution within the next 12 months.

What is KAVACH?

KAVACH is an Automatic Train Protection System developed to enhance safety in railway operations. This state-of-the-art technology ensures secure and efficient train movement by minimizing human errors and enhancing signalling system reliability. GG Tronics is a developmental vendor for KAVACH and specializes in electronic safety embedded signalling systems, offering solutions such as digital axle counters that comply with international standards like CENELEC SIL 4.

About GG Tronics India

A leader in railway transportation safety, GG Tronics designs, manufactures, supplies, and installs advanced signalling systems. Among its offerings are single and multi-section digital axle counters and high-availability digital axle counters, both certified by RDSO.

Out of the nine analysts covering CG Power, six have issued a "buy" rating, while three recommend a "sell." This mixed sentiment reflects the company's growth potential and recent achievements.

CG Power's shares have performed remarkably well, reflecting strong investor confidence. As of 2:15 pm on November 27, the stock was trading at Rs 756.10 on the National Stock Exchange (NSE), registering a gain of nearly 3% for the day. Over the past year, CG Power has delivered a stellar return of over 75%. In 2024 alone, the stock has risen approximately 70%.