Buy CESC; target Rs 368: SPA Research
SPA Research is bullish on CESC and has recommended buy rating on the stock with a target of Rs 368 in its May 10, 2012 research report.
SPA Research is bullish on CESC and has recommended buy rating on the stock with a target of Rs 368 in its May 10, 2012 research report.
"CESC generated 1997 MU in Q4FY12, up by 9% YoY and down by 9% QoQ. The sales volume increased by 3% YoY and decreased by 10% QoQ to 1811 MU. The company generated less power during the quarter as Budge Budge unit was shut down for 10 days due to maintenance. In Q4FY12, CESC has recorded a lower PLF of about 78.5% vs 85.0% in Q4FY11 due to maintenance shutdown of Budge Budge unit. For the full year, PLF stood at 88% in FY12 vs 85% in FY11. The average T&D losses in FY12 stood at 12.8% vs 12.9% in FY11 registering a decline of 100bps.”"In March 2012, CESC got the nod from WBERC to hike tariff by 13% from INR 5.19/kwh to INR 5.88/kwh with retrospective effect from April 2011. Hence average tariff in Q4FY12 increased by 54% QoQ and 44% YoY to INR 7.44/unit. The total operating income stood at INR 46bn representing a growth of 12% over FY11 aided by 10% increase in average realisation to INR 4.6/ kwh and 2% increase in sales volume to 10207 MU. Spencer's average sales per sq ft per month increased to INR 1060 in FY12 vs. INR 957 in FY11 showing a growth of 9.7%. Same Stores Sales (SSS) increased from INR 1000/ sqft/mth in FY11 to INR 1147/sqft/mth in FY12 registering a growth of 15%. Spencer's has made a store level EBIDTA of INR 32/sqft/ mth in FY12.”"CESC's core regulated business is fully secured in the terms of fixed ROE, secured fuel availability and power offtaking agreements. We believe future growth would come from capacity expansion through SPVs, expected turnaround in retail business and commissioning of premium mall within a year. We have introduced FY14E estimates and expect the company to register a CAGR of 14% & 17% in topline and bottomline over FY12E-14E. We maintain BUY on CESC with a revised target price of INR 368 per share based on SOTP Valuation approach. The stock is currently trading at a P/E of 5.5x and P/BV of 0.5x its FY14 consolidated numbers,” says SPA Research report.Non-Institutions holding more than 90% in Indian cos Disclaimer: 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.To read the full report click on the attachment 
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