Buy CESC; target of Rs 93: Sharekhan

Sharekhan is bullish on CESC has recommended buy rating on the stock with a target price of Rs 93 in its research report dated August 04, 2023.

Broker Research

August 09, 2023 / 13:34 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Sharekhan's research report on CESC

Q1FY24 consolidated PAT grew strongly by 21% y-o-y to Rs. 347 crore led by robust PAT growth from standalone business and strong earnings contribution from subsidiaries. Standalone PAT grew by 23% y-o-y led by healthy power sales volume, lower T&D loss and better tariff. Rajasthan DF posted PAT growth of 2.8x y-o-y as all three circles recorded a positive bottom line. Dhariwal/Crescent Power/Noida Power posted 11%/400%/59% y-o-y increase in PAT while Haldia PAT decline by 6% y-o-y and Malegaon DF loss increased to Rs. 33 crore. We view the turnaround of Rajasthan DF as a key positive and potential turnaround of Malegaon DF along with sustained strong performance from Dhariwal and standalone operations would improve consolidated earnings over the coming years.

Outlook

We maintain our positive stance on power sector and retain Buy on CESC with a revised PT of Rs. 93. Valuation of 0.9x FY25E P/BV is attractive, and stock offers healthy dividend yield of ~5-6%. Turnaround of power distribution businesses could create value.

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