Please refer to important disclosures at the end of this report
CESC Ltd, the flagship company of the RP-Sanjiv Goenka Group, is engaged in
the generation and distribution of electricity in Kolkata since 1897 serving
3 million consumers. This includes domestic, industrial and commercial users.
CESC is one of the efficiently managed integrated private power utility compan
in India. CESC has generated RoE of ~18- 20% on normative equity ove
FY10-16 compare to regulatory RoE of ~16%. Apart from generation, the
company is also engaged in distribution business which generates higher margin
for the company. To support power business it has bought coal block b
competitive bidding and CESC has a presence in coal business which furthe
strengthens supply of raw material. For a future growth, the company has
successfully won the power distribution franchise license for two cities – Kota and
Bharatpur - from the Rajasthan government utility Jaipur Vidyut Vitaran Nigam
Ltd for 20 years and expanding in renewable energy. Over longer term CESC
has the plan to unlock the value in of its retail business through IPO route, thus
would provide incremental cash inflow for the expansion in power segment
business without leveraging balance sheet. The company has multiple positive
factors which could play for long term positively such as integrated business
model, strengthening distribution business, expansion in renewable energ
segment, unlocking of retail business and finally efficient team management.
Hence, Buy.
CMP `855
Stock Info
Bloomberg Code [email protected]
Shareholding Pattern (%)
Promoters 49.9
MF / Banks / Indian Fls 23.9
FII / NRIs / OCBs 22.7
Indian Public / Others 3.5
Abs. (%) 3m 1yr 3yr
Sensex 7.6 22.0 39.0
CESC 45.0 101.7 102.4
Reuters Code CESC.BO
BSE Sensex 28,301
Nifty 8,778
Avg. Daily Volume 31,519
Face Value (`)10
Beta 1.0
52 Week High / Low 870/410
Market Cap (` cr) 11,330
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Others | Powe
February 17, 2017
CESC | Power
January 04, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website:
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Disclosure of Interest Statement CESC
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
: Reduce
-5% to -15%
< -15