IIFL Securities Stock Idea: Buy Cesc with Target Rs 167

IIFL Securities has issued a buy recommendation for Cesc, currently trading at Rs 161.6. The brokerage firm has set a target price of Rs 167 for the stock, implying an upside potential of approximately 3.3%. This bullish outlook is based on the company's strong financial performance, robust order book, and positive industry outlook. Cesc's revenue and profitability have been growing steadily, driven by new project wins and operational efficiency. The company's healthy order book and favorable regulatory environment are expected to continue to support its growth trajectory in the upcoming quarters.

About Cesc:

CESC Limited (Calcutta Electric Supply Corporation) is an Indian electrical utility company based in Kolkata, West Bengal. It is India's largest private sector power distribution company, serving over 3 million customers in Kolkata and its suburbs. CESC also generates and transmits electricity, and has operations in other Indian states such as Maharashtra, Andhra Pradesh, Telangana, Rajasthan, and Madhya Pradesh. The company is listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE).

52 Week Price Trend:

Cesc, trading at Rs 161.6, has demonstrated significant growth over the past year, with a 52-week high of Rs 149.9 and a low of Rs 62.1. The company's strong financial performance, strategic investments in renewable energy, and favorable market conditions have contributed to its positive price trajectory. Analysts predict further upside potential, citing the company's robust operations and long-term growth prospects. Investors should monitor the company's financial results, industry trends, and macroeconomic factors to make informed investment decisions.

Stratzy's MOST Analysis:

CESC's BBB rating from Stratzy's MOST framework suggests moderate fundamental risks. The framework evaluates management, outlook, safety, and trend, assigning scores in each category to arrive at an overall rating. CESC's rating indicates strong management and a positive outlook, but some concerns may exist regarding safety and trend. This rating signals that while CESC has favorable aspects, investors may need to exercise caution due to potential risks associated with these specific parameters.

Company's Fundamentals:

CESC, listed on NSE, has a stock PE ratio of 12.15, PB ratio of 1.49, and a dividend yield of 3.48%. The PE ratio (price-to-earnings ratio) of 12.15 implies that investors are willing to pay Rs. 12.15 for every rupee of earnings. The PB ratio (price-to-book ratio) of 1.49 shows that the company's market value is 1.49 times its book value, indicating that the stock is trading at a premium. The dividend yield of 3.48% indicates that investors can earn Rs. 3.48 for every Rs. 100 invested in the stock from dividends. These metrics suggest that CESC is reasonably valued, trading at a slightly higher premium compared to its book value, while also providing a moderate stream of dividend income.

Fundamental and Technical information provided in this blog were last updated on 26 Jun, 2024

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