Feb 16, 2017 03:20 PM IST | Source:

Hold CESC; target of Rs 900: ICICI Direct

ICICI Direct recommended hold rating on CESC with a target price of Rs 900 in its research report dated February 13, 2017.

Hold CESC; target of Rs 900: ICICI Direct

ICICI Direct's research report on CESC

CESC reported better-than-expected Q3FY17 results on account higher-than-expected traded volume from the subsidiary. The power purchase from subsidiary increased 23% YoY to 129 crore units Lower fuel costs in the base business also helped EBITDA and profitability. The base business saw a decline in generation to the tune of 26.8% YoY to 117 crore unit. Revenues came in at Rs 1620 crore vs. our estimate of Rs 1542.5 crore.


Hence, we have revised our SoTP based valuation methodology and revised the target price to Rs 900 from Rs 675 earlier. Given the run up in the stock, we maintain HOLD. However, any significant correction should be a buying opportunity.

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