Buy CESC; target of Rs 162: Sharekhan

Sharekhan is bullish on CESC has recommended buy rating on the stock with a target price of Rs 162 in its research report dated January 20, 2024.

Broker Research

January 23, 2024 / 12:16 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on CESC

Consolidated PAT fell 12% y-o-y to Rs. 281 crore due to earnings decline from key subsidiaries/standalone business and higher loss at Malegaon DF. Haldia/ Dhariwal Infra’s PAT declined by 31%/18% y-o-y due to lower PLFs while Noida Power PAT declined by 13% y-o-y. Rajasthan DF turned break-even at PAT level. PLF at Haldia/ Dhariwal was hit by annual maintenance shutdown and is likely to recovery strongly in Q4FY24. Aggressive RE strategy with a plan of 3 GW (capex of ~Rs. 12,000-13,000 crore) in 4-5 years offers a good value proposition given lower RE cost, strong growth prospects, and likely improvement in ESG rating. CESC’s subsidiary has been selected as successful bidder to set-up of 10,500 TPA green hydrogen production facility in India.

Outlook

We retain Buy on CESC with a revised PT of Rs. 162. Valuation of 1.5x FY26E P/BV is attractive, and stock offers a healthy dividend yield of ~3-4%. Turnaround of power distribution businesses could create value.

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