CESC up over 1%; brokerages tag buy on stock, raises target up to Rs 1,200

Brokerage: CLSA | Rating: Buy | Target: Rs 1,200

Global broking firm CLSA has maintained a buy call on CESC and has raised the target price to Rs 1,200 from Rs 1,000 per share. The firm believes that the key catalysts ahead are scale-up of distribution business. However, poor liquidity post de-merger is a risk.

The firm is of the view that restructuring is on track and feels that the company is emerging as a pure play on the power reform.

Brokerage: Nomura | Rating: Neutral | Target: Rs 948

Research house Nomura has maintained a neutral rating on CESC with target of Rs 948. It believes that the second quarter stand-alone earnings was in line with healthy show by the BPO division. However, the retail metrics was weak, but EBITDA was positive.

Progress on business restructuring remains the near-term focus adding that turnaround of Chandrapur and Spencer’s could lead to earnings uptick which holds key in medium term. Power Grid and NTPC are top picks in the sector, it added.

Brokerage: Kotak Securities| Rating: Add | Target: Rs 1,070

According to Kotak Securities, CESC reported healthy operating metrics for the Kolkata distribution business. However, Kotak feels that the valuations are inexpensive at 10x P/E & 1X P/B on FY19.

Sanjiv Goenka, Chairman of RP-Sanjiv Goenka Group & CESC in an interview to CNBC-TV18 said he is upbeat on the Spencer's Retail business doing well. Despite GST impacting sales in first quarter, Goenka said the sales in next few quarters are expected to be robust.

At 10:36 hrs CESC was quoting at Rs 1,003.10, up Rs 12.05, or 1.22 percent. It has touched an intraday high of Rs 1,006.00 and an intraday low of Rs 995.