CESC Ltd. share price target

Energy sold during Q3FY20, in the standalone business declined 7.7% to 211.9 crore units vs. our estimate of 222.8 crore units while realisation was at | 7.8/kWHR vs. our expectation of 7.5 kWHR. Total generation was down 10.3% YoY at 122.4 crore units. Energy purchased were at 126.7 crore units vs. our estimate of 126.2 crore units. Plant load factor (PLF) of the Budge Budge, southern plants for Q3FY20 were at 69.2%, 26.3%, respectively. Revenues were at | 1648 crore vs. our estimate of | 1659.8 crore, in line with estimates. On the other hand, consolidated revenues came in at | 2344 crore...

CESC Limited (CESC) reported strong consolidated Q2FY2020 results with 12.6% y-o-y increase in PAT to Rs. 366 crore, given strong performance of Noida distribution business (132% y-o-y rise in PAT to Rs. 65 crore) and sharp reduction in losses at Dhariwal to Rs. 25 crore (vs. loss of Rs. 63 crore in Q2FY2019). However, standalone performance was muted with marginal 1.5% y-o-y increase in PAT to Rs. 275 crore, given only 1.7% rise in power sales volume. The board of directors has decided not to pursue the demerger of the generation...

Energy sold during Q2FY20, in the standalone business, declined 1.4% at 171.3 crore units vs. our estimate of 182 crore units while realisation was at | 7.7/kWHR vs. our expectation of 7.5 kWHR. Total generation was down 1.9% YoY at 171.3 crore units. Energy purchased was at 165.7 crore units vs. our estimate of 168 crore units. The same has increased YoY by 3.4%....

PAT was up ~13% YoY to INR3.6b in the quarter on carrying cost recovery at Noida (~INR150-200m). For 1HFY20, PAT was Profits at Noida rose YoY to INR790m (v/s est. INR450m) on favorable order Distribution franchisees net loss was slightly higher YoY at INR30m (v/s est. Crescent and Surya (RE)s PAT was higher YoY at INR170m (v/s est. Dhariwals net loss stood at INR250m. While YoY (INR630m loss in 2QFY19), the loss may appear lower; the company has noted that it is on account of re- classification and possible adjustments in the previous year. Generation at Dhariwal was 14% lower YoY at 504MUs. Dhariwal has signed a PPA with Maharashtra for 170MW supply of power from Nov19 for a one-year period. Untied generation capacity and scale-up of DFs have a potential to boost earnings. The stock trades attractively at ~8x FY21E P/E even as visibility of earnings at Dhariwal and DFs improve, and factoring in the tightening of norms at Haldia and S/A.

CESC Limited's (CESC) standalone Q1FY2020 profit after tax (PAT) rose strongly by 18% y-o-y to Rs. 217 crore led by higher power sales volume (up 8% y-o-y) and improved realization (up 1.2% y-o-y). The company started reporting consolidated financials from Q1FY2020 and consolidated PAT rose by only 9.4% y-o-y to Rs. 232 crore as strong performance from standalone business was partially offset by lower profit contribution from subsidiaries. We believe that CESC is trading at an attractive valuation of 9.1x FY2021E EPS and 0.9x...

Energy sold during Q1FY20, in the standalone business declined 7.6% at 305.7 crore units vs. our estimate of 284.7 crore units while realisation was at | 7.7/Kwhr vs. our expectation of |7.5 Kwhr. Energy purchased was at 177.4 crore units vs. our estimates of 165 crore units. The same has increased YoY by 10.3%. On a plant wise basis, Budge Budge plant generated 157.6 crore units while Southern generated 14.2 crore units for Q1FY20. Hence, total generation was at 171.8 crore units for Q1FY20. On the PLFs side, Budge Budge plant reported 96.2% while southern plant reported...

Standalone (S/A) PAT grew by a healthy ~18% YoY to INR2.2b (our estimate: INR1.9b), led by higher sales (up ~8% YoY to 3.1BU) due to strong demand (likely because of seasonal factors). T&D; losses are estimated to have remained steady at ~9-10%. CESC has started reporting consol. quarterly performance from this quarter. Consol. PAT was up ~9% YoY to INR2.3b in 1QFY20....

CESC Limited's (CESC) standalone business generates steady earnings and cashflow, while we expect its loss-making subsidiary Dhariwal Infrastructure and the Rajasthan distribution franchisee (DF) to pare losses and turn profitable in FY2021/FY2022. We believe that CESC is trading at a reasonable valuation of 9x FY2021E EPS and 0.9x FY2021E book value on a standalone basis. Hence, we maintain our Buy rating on CESC with revised SoTP based price target (PT) of Rs. 905 (increased on account of a higher valuation multiple for...

Energy sold during Q4FY19, in the standalone business declined 4.2% at 229.1 crore units vs. our estimate of 2485 crore units while the realisation was at | 7.25/Kwhr vs. 6.82/Kwhr in Q4FY18. Energy purchased was at 104.3 crore units vs. our estimate of 125.4 crore units. The same has declined 21% YoY. For FY19, power purchase was down at 558.1 crore units vs. 563.7 crore units in FY18. On a plant wise basis, the Budge Budge plant generated 601.5 crore units while southern generated 2.84 crore units for FY19. The company continues to impress on reducing T&D; losses as the same came...

demand off-take of power during FY2019, led to lower generation of power both at Budge Budge unit and Southern unit (down by 0.3% and 6.6% y-o-y respectively). Power purchased also remained lower by 1.0% during the year. This led to 0.4% decline in revenues y-o-y, as realisation also did not support and was lower by 0.8% y-o-y. Though PLF was lower at both...