Emkay Global Financial's research report on CESC
CESC reported standalone PAT of Rs2.43bn for the quarter, up 3.4% YoY and in line with our estimates. Consolidated PAT came in at Rs3.2bn, down from Rs3.4bn YoY due to lower profit at Haldia Energy. Dhariwal Infrastructure has reported 1HFY23 PAT at Rs1.15bn vs Rs590mn YoY, while Noida PAT came in at Rs750mn vs Rs520mn during the same period. Performance of Distribution segments of Rajasthan and Malegaon was not enthusing. Malegaon reported loss of Rs480mn vs loss of Rs290mn due to lower demand, as the circle has a high proportion of textile consumers. While revenue in the Rajasthan circle improved, but there was no major change in the loss levels.
We maintain BUY, with Sep-23 TP of Rs101/share (from Rs108), as we presently keep value of Distribution franchisees (DFs) and the Chandigarh area as negligible. Once the DFs loss trajectory sees improvement, their value would become more relevant. Our FY23E/FY24E EPS has been cut by 6-7%, to factor-in the slower improvement in DFs