Buy CESC, tgt Rs 643: Angel Broking

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Buy CESC, tgt Rs 643: Angel Broking

Angel Broking has maintained buy rating on CESC with target price of Rs 643. We expect CESC to record a CAGR growth of 7.6% in Top-line over FY2008-10, while Bottomline would grow at a CAGR of 10.4% in the mentioned period.

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Angel Broking has maintained buy rating on CESC with target price of Rs 643 in its May 13, 2008 report. "We remain positive on the domestic Power Sector and expect it to grow in line with the country's GDP growth. Our positive stance stems from the fact that peak power demand in excess of 13% gives immense opportunity to players like CESC, who are in a position to tap this huge opportunity on account of their vast experience. Further, with the company also having huge expansion plans which are on track, we believe rapid growth would continue going ahead"

"We expect CESC to record a CAGR growth of 7.6% in Top-line over FY2008-10, while Bottomline would grow at a CAGR of 10.4% in the mentioned period. At the CMP, the stock is trading at 14.9x FY2010E EPS and 1.7x FY2010E P/BV. We have introduced our FY2010 estimates. We have also assigned a lower FY2010 P/BV multiple to the company's existing Power business at 1.75x (earlier 2.5x FY2009E) owing to drop in relative valuations. Hence, we revise our SOTP Target Price to Rs 643 (Rs 723). Nonetheless, considering that the company is inexpensive in terms of P/BV on FY2010E basis, we maintain a Buy on the stock" according to Angel broking research report.