MAM
CG Power’s profit shrinks as operational costs weigh heavily on Q2 FY25
Mumbai: CG Power and Industrial Solutions Ltd’s Q2 FY25 financial results tell a story of struggling profitability amidst growth. The net profit dropped by 8.8 per cent year-on-year to Rs 221 crore in Q2 FY25, as operational challenges weighed on earnings. The company also reported a 4.6 per cent decline in Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA), which stood at Rs 294.7 crore for the quarter. The EBITDA margin shrank significantly, falling by 320 basis points to 12.2 per cent, down from 15.4 per cent a year earlier. The drop in profit is primarily driven by escalating operational costs, including materials and employee expenses, which surged due to inflationary pressures and a competitive business environment.
The second-quarter results, which were approved at the 21 October 2024 board meeting, reveal a significant rise in the cost of materials, reaching Rs 1,558.22 crore compared to Rs 1,258.59 crore in the same period last year. Employee benefit expenses have also jumped by 17 per cent to Rs 114.44 crore, signalling ongoing cost pressures. While revenue from the industrial and power segments showed growth, these gains were offset by mounting expenditures, with other expenses rising to Rs 246.27 crore.
“The increase in operational costs, particularly in raw materials and employee benefits, continues to put pressure on our margins. We are taking measures to optimise our cost structure,” said the management, reflecting the growing need to improve operational efficiency.
Adding to the company’s financial burden, the board approved an additional capacity expansion at its Mandideep plant, requiring an investment of Rs 26.64 crore. This move comes after a similar expansion initiative a year ago, which has yet to fully yield returns. With current utilisation at 85 per cent, the additional capacity aims to meet future transformer demand, yet it also adds to capital expenditure concerns at a time when profitability is already under strain.
The tax expenses for Q2 surged dramatically, with the company reporting a total tax bill of Rs 75.72 crore compared to Rs 80.40 crore last year. Additionally, finance costs doubled, reaching Rs 1.94 crore, exacerbating the strain on net income. The ongoing cost of expansion and the higher depreciation expense of Rs 21.29 crore are further dragging down profitability.
Shares of CG Power are down to the lowest point of the day, currently trading 5.5 per cent lower at Rs 774.05 post the earnings announcement. The stock is still up 73 per cent so far in 2024.
AD Agencies
Abhay Duggal joins JioStar as director of Hindi GEC ad sales
The streaming giant brings in a seasoned revenue hand as the battle for Hindi television advertising heats up
MUMBAI: Abhay Duggal has a new desk, and JioStar has a new weapon. The media and entertainment veteran has joined JioStar as director of entertainment ad sales for Hindi general entertainment channels, adding 17 years of hard-won revenue experience to one of India’s most powerful broadcasting operations.
Duggal is no stranger to big portfolios or bruising markets. Before joining JioStar, he spent a brief stint at Republic World as deputy general manager and north regional head for ad sales. Before that, he put in three years at Enterr10 Television, where he ran the north region for Dangal TV and Dangal 2, two of India’s leading free-to-air Hindi channels. The north alone accounted for more than 50 per cent of total channel revenue on his watch, a number that tends to get attention in any sales meeting.
His longest stint was at Zee Entertainment Enterprises, where he spent over six years rising to associate director of sales. There he commanded the Hindi movies cluster across seven channels, owned more than half of north India’s revenue across flagship properties including Zee TV and &TV, and closed marquee sponsorships across the Indian Premier League, Zee Rishtey Awards and Dance India Dance. He also handled monetisation for the English movies and entertainment cluster and the global news channel WION, a portfolio that would stretch most sales teams twice his size.
Earlier in his career Duggal closed what was then a Rs 3 crore single deal at Reliance Broadcast Network, one of the largest in Indian radio at the time, before that he helped launch and monetise JAINHITS, India’s first HITS-based cable and satellite platform.
His edge, by his own account, lies in marrying data and instinct: translating audience trends, inventory signals and client demands into long-term partnerships built on cost-per-rating-point discipline rather than short-term deal chasing. In a media landscape being reshaped by streaming, fragmented attention and AI-driven advertising, that kind of rigour is increasingly rare and increasingly valuable.
JioStar, which blends the scale of Reliance’s Jio platform with the content firepower of Star, is doubling down on its advertising business at precisely the moment the Hindi GEC market is getting more competitive. Bringing in someone who has spent nearly two decades doing exactly this, across some of India’s most watched channels, is a pointed statement of intent. Duggal has spent his career turning audiences into revenue. JioStar is clearly betting he can do it again, and bigger.
