Buy Dividend Paying Power Sector Stock After Decent Q3, Target Price Rs 95: Sharekhan

Sharekhan has suggested investors to buy mid cap Power sector stock, CESC Ltd with a target price of Rs 97 apiece. Last trading price of the stock is Rs 77.45 on BSE. If you buy CESC Ltd now, you can get potential return of 23%.

The analyst said, "Standalone PAT surged by 1% y-o-y to Rs. 186 crore (18% above our estimate) reflecting low single digit growth in power sales volumes." Check details below:

1. CESC Ltd Stock Performance & Return

The last trading price of the stock is Rs 77.45 apiece on BSE. Its 52-week high is Rs 88.00 apiece and 52-week low is Rs 68.00 apiece, respectively. It has a market capitalisation of Rs 9,676.29 crore.

The stock gave a return of 26% in last 2-years, fell 1% in last 1-year, and 2% in last 6-months. It surged 7% in last 3-months, and 5% in last 1-month.

The company declared a dividend of Rs 4.5 per share on 14 Feb, 2023. It fixed record date as 24 Feb, 2023.

2. CESC Ltd Valuation

According to Sharekhan, "We maintain a Buy on CESC with an unchanged PT of Rs. 95 crore, given attractive valuation of 0.9x FY24E P/BV and dividend yield of ~5-6%. Turnaround of power distribution businesses could create value."

Key Positives: Noida Power reported robust 104% y-o-y PAT growth in Q3FY23. Steady standalone PAT of Rs. 186 crore was 18% above our estimate.

Key Negatives: Rajasthan DF's net loss at Rs. 11 crore versus PAT of Rs. 2 crore in Q3FY22. Haldia's PAT declined by 14% y-o-y.

3. CESC Ltd About

CESC started operations in 1899. The company is a fully integrated power utility company. The company is the sole electricity distributor within an area of 567 sq. km of Kolkata and Howrah and serves 3.3 million consumers (including domestic, industrial, and commercial users).

The company owns and operates three thermal power plants with generation capacity of 1,125 MW for its Kolkata distribution business.

 

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.