Buy CESC; target of Rs 195: Sharekhan

Sharekhan is bullish on CESC has recommended buy rating on the stock with a target price of Rs 195 in its research report dated January 13, 2025.

Broker Research

January 14, 2025 / 14:06 IST

Buy

Sharekhan's research report on CESC

CESC’s consolidated PAT of Rs. 265 crore decreased 5.7% y-o-y with increase in losses in Malegaon and compensated a little by rise in Haldia and Dhariwal profits. Standalone PAT rose 1.2% y-o-y to Rs. 172 crore with unit sales of 2,423MU (+1.6% y-o-y). Dhariwal Infrastructure/Haldia energy profit increased 21.4%/16.7% y-o-y to Rs. 51/56 crore respectively with higher generation while Malegaon losses increased to Rs. 38 crore from Rs. 27 crore last year. Aggressive RE growth strategy with a plan of 3.2GW (capex of ~Rs. 12-13k cr) in the next 4-5 years is a good value proposition given the lower RE cost and strong growth prospects. Company is also setting-up a 10,500 tonnes per annum of green hydrogen production facility.

Outlook

We retain Buy on CESC with an revised PT of Rs. 195 on a SOTP basis. Renewable energy capex is going to drive the growth and turnaround of the distribution business would further aid the earnings.

For all recommendations report, click here