ICICI Securities research report on CESC
CESC has reported better-than-expected earnings for its consolidated business in Q1FY21 despite being affected by the lockdown. Standalone/consolidated PAT came in at Rs13.4bn/Rs2bn (-38.2%/-13.4% YoY) mainly due to combined loss of Rs640mn at Rajasthan distribution franchises (PAT -37.7% YoY) and the recently started Malegaon DF. However, the loss was partly offset by good performance at Chandrapur (PAT Rs240mn vs loss of Rs240mn in Q1FY20). Lockdown affected not only the DF businesses, but also incentive income in the regulated business though DF losses were lower than expected.
Outlook
There was fixed-cost under recovery, which is expected to be addressed in the coming quarters. We maintain our BUY rating and target price of Rs851/share on CESC.
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