Business
Buy CESC; target of Rs 162: Sharekhan
Buy CESC; target of Rs 162: Sharekhan
About this update from Cesc Ltd
Sharekhan's research report on CESCConsolidated PAT fell 12% y-o-y to Rs. 281 crore due to earnings decline from key subsidiaries/standalone business and higher loss at Malegaon DF. Haldia/ Dhariwal Infra’s PAT declined by 31%/18% y-o-y due to lower PLFs while Noida Power PAT declined by 13% y-o-y. Rajasthan DF turned break-even at PAT level. PLF at Haldia/ Dhariwal was hit by annual maintenance shutdown and is likely to recovery strongly in Q4FY24. Aggressive RE strategy with a plan of 3 GW (capex of ~Rs. 12,000-13,000 crore) in 4-5 years offers a good value proposition given lower RE cost, strong growth prospects, and likely improvement in ESG rating. CESC’s subsidiary has been selected as successful bidder to set-up of 10,500 TPA green hydrogen production facility in India.OutlookWe retain Buy on CESC with a revised PT of Rs. 162. Valuation of 1.5x FY26E P/BV is attractive, and stock offers a healthy dividend yield of ~3-4%. Turnaround of power distribution businesses could create value.For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. CESC - 23012024 - khan