Buy CESC, target price Rs 113: HDFC Securities

HDFC Securities has buy call on CESC with a target price of Rs 113. The current market price of CESC Ltd. is Rs 73.25.
Time period given by analyst is one year when CESC Ltd. price can reach defined target.

CESC Ltd., incorporated in the year 1978, is a Mid Cap company (having a market cap of Rs 9703.18 Crore) operating in Power sector.

CESC Ltd. key Products/Revenue Segments include Electricity and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 3420.00 Crore, up 5.75 % from last quarter Total Income of Rs 3234.00 Crore and up 13.89 % from last year same quarter Total Income of Rs 3003.00 Crore. Company reported net profit after tax of Rs 445.00 Crore in latest quarter.

Investment Rationale
Standalone revenue is expected to increase by 13.2% YoY to INR21.9bn on the back of increased demand, aided by peak summer and lower YoY base. Accordingly, the brokerage expects PAT to increase 33.2% YoY to INR1.8bn. Generation across Chandrapur and Haldia has increased marginally YoY. The three-year medium-term PPA with the Railway Energy Management Co (REMCL) to supply 210 MW of power from its Dhariwal project at a tariff of INR4.1/unit has begun, which should boost consolidated earnings, going ahead.

Promoter/FII Holdings
Promoters held 52.11 per cent stake in the company as of 31-Mar-2022, while FIIs owned 13.81 per cent, DIIs 20.99 per cent.