Business
Buy CESC; target of Rs 199: Sharekhan
Buy CESC; target of Rs 199: Sharekhan
About this update from Cesc Ltd
Sharekhan's research report on CESCConsolidated PAT increased by 9% y-o-y to Rs. 378 crore with good performance in standalone business, Haldia and Dhariwal and dragged down by Malegaon DF. Standalone PAT rose 13% y-o-y to Rs. 192 crore due to good performance in the distribution business. Dhariwal Infrastructure/Haldia energy profit increased 42%/35% y-o-y to Rs. 112/84 crore respectively while Malegaon losses increased to Rs. -42 crore from Rs. -33 crore last year. Aggressive RE growth strategy with a plan of 3GW (capex of ~Rs. 12-13k cr) in the next 4-5 years makes good value proposition given the lower RE cost, strong growth prospects, and likely improvement in ESG rating. Its subsidiary has been selected as successful bidder for setting-up of 10,500 tonnes per annum of green hydrogen production facility in India.OutlookCompany has implemented a 5.7% tariff hike for recovery of fuel and power purchase adjustment surcharge from June. We retain Buy on CESC with a revised PT of Rs. 199 on a SOTP basis. Renewable energy capex revival is going to drive the growth and turnaround of the distribution business would further aid the earnings.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_19082024_Sharekhan