CESC - Q2FY21 Result Update - ICICI Direct

Consistent improvement of generation and distribution subsidiaries was the key takeaway in CESC's Q2FY21 results as Dhariwal Infra posted profit for H1FY21 while losses at the distribution level fell sharply. On a standalone basis, Q2FY21 results were below estimates on all fronts as energy sold came in lower-than-expected on account of lockdown. EBIDTA was impacted mainly on account of higher employee costs and other expenses. Even PAT was aided by negative tax charge.

Valuation & Outlook

We believe CESC lacks fresh growth triggers apart from the turnaround in the distribution business and Dhariwal Infra. The company now has to look beyond and spell out the growth roadmap for the medium term to long term. Even though a strong balance sheet, high dividend payout will cushion the stock price, it will not act as a catalyst for a rerating unless growth plans are unveiled. We continue to value the stock at 7x FY22E EPS to arrive at a target price of Rs. 680 for the stock. We maintain our HOLD rating.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_CESC_Q2FY21.pdf

Shares of CESC LTD. was last trading in BSE at Rs.586.3 as compared to the previous close of Rs. 581.95. The total number of shares traded during the day was 2278 in over 202 trades.

The stock hit an intraday high of Rs. 588.8 and intraday low of 580.55. The net turnover during the day was Rs. 1334297.

Source : Equity Bulls

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