CESC Ltd. share price target

Tax expense stood at `1050 mn (+16.7% q/q;-3.7% y/y). Consequently, PAT stood at `2420 mn (+39.1% q/q; +3.9% y/y). Long term debt-equity ratio stood at ~0.6. T&D; losses remained at < ~12%. CESC got distribution franchisee in 2 cities Kota and Bharatpur (Rajasthan)....

ICICI Securities Ltd | Retail Equity Research CESC reported better than expected Q2FY17 results on the back of higher than expected sales and lower fuel costs. Net sales came in at | 2016 crore as per the new Ind AS. This is higher as compared to the estimates of |1780 crore. The reason for higher than expected revenues came can be attributed to higher purchase of power from its subsidiary Haldia Energy. CESC's own generation was down 13.2% YoY while power purchase went up 59% YoY....

CESCs 2QFY17 result was ahead of our estimates led by continued growth in power demand (3.4% for 2QFY17 and 6.0% for 1HFY17) and contribution from merchant sales (7mn units in 2QFY17). PAT at Rs 2.4bn was flat as the increase in tariff was negated by the recent WBERC order disallowing recovery of negative bid on its captive mine.

At CMP, the stock trades at 0.8x FY18E BV, which in our view is attractive mainly due to commissioning of plants, improvement in retail business with positive EBITDA at store levels (Spencer's Retail) and better operating performance of First Source. Hence, we reiterate our...

WBERC has released its tariff order for FY17 17 for CESC, wherein they have adjusted the negative bid for the Sarastolli coal block that was won by CESC at a negative bid (reverse bidding) of `470/tn....

BUY CESC Ltd between Rs. 627 - 565 for the target of Rs 685.

mainly due to commissioning of Chandrapur plant. Raw material expenditure stood at 23% of net sales on account of high operational efficiency during the quarter. Depreciation stood at `960mn (+5.5% q/q;-3% 3%% y/y) .Interest expense stood at...

CESC reported better-than-expected Q1FY17 results on the back of higher-than-expected sales and lower finance costs. Net sales came in at | 1888 crore as per the new Ind AS. This is higher compared to estimates of | 1805 crore. The higher-than-expected revenues can be attributed to higher purchase of power from its subsidiary Haldia Energy. CECS’s own generation was down 7.8% YoY while power purchase went up 36% YoY .Reported absolute EBITDA came in at | 387 crore vs. our estimate of | 377 crore. This was on the back of lower other expenses despite the fact that power purchase was at | 684 crore vs. our estimate of | 570.1 crore. Higher-than-expected revenues and EBITDA led PAT to come in at | 174 crore vs. our estimate of | 167 crore.

Valuation : However, factoring in the two scenarios of recovery and non-recovery of | 230 crore annual loss (for negative bidding of | 470/tonne) we have valued CESC on both base and bear scenario by assigning an equal weightage to both cases. Accordingly, we assign a 80% weightage to the base case and 20% to the bear case valuation to arrive at an SOTP revised target price of | 645 for CESC (earlier | 623). However, the price has run up from our last update. Hence, we downgrade the stock from BUY to HOLD recommendation

Post their BUY recommendation in April 2016, CESC&rsquo;s stock has moved up 24%. We retain faith owing to strong earnings outlook (all the businesses on an upward trajectory). While the Haldia ramp-up has led to 85%YoY consolidated earnings growth in FY16, substantial reduction of losses in Chandrapur will drive earnings CAGR of 58% over FY16-18E (79/39%YoY growth in FY17/18E), leading to RoE expansion from 7% to 13% over FY16-18E.&nbsp;HDFC Securities&nbsp;increase&nbsp;SOTP-based TP to Rs 685 (implied valuation of 1.2x P/B FY18E) from Rs 637 by factoring in (1) Better-than-expected performance of regulated operations (Parent + Haldia), (2) Trends from the 2015-16 annual report, and (3) Current valuations of FSL. CESC is currently trading at a reasonable valuation of 1.1x P/B FY18E.

Trendlyne has 6 reports on CESC updated in the last year from 3 brokers with an average target of Rs 654. Broker has a rating for CESC with 2 price downgrades and 2 price upgrades in past 6 months.

CESC's net profit has increased by 1.6% yoy to Rs2.48bn v/s our estimate of Rs 1.9bn in 4QFY16 while the Company's revenue surged 4.4% during the quarter notwithstanding lower generation by standalone plants (down 22% yoy) on account of higher power purchased (up 77% yoy) from its subsidiary plant. As the stock price has gained by 25% in last 3 months mainly on account of signing of Power Purchase Agreement (PPA) with TN Generation & Distribution Corporation (TANGEDCO) & Noida State Electricity Board (SEB), we have revised our recommendations from BUY to ACCUMULATE with an upwardly revised Target Price of Rs620....