Maintain ‘buy’ on CESC with unchanged FV of Rs 800

Improving pay-out. CESC reported consolidated profits of Rs 3.2bn (+23% yoy) and standalone profits of Rs 1.8 bn (+3.4% yoy). Profits at Dhariwal (600MW) improved to Rs 280 mn compared to a loss of Rs 150 mn in 3QFY20—a key driver for strong consolidated performance. CESC trades at 6.5X P/E on earnings of FY2022E, with continued improvement from earnings of Dhariwal. A healthy Rs 45/share of interim dividend shows intent of the company to increase the pay-out ratio and right-size the balance sheet. Maintain BUY rating with revised FV of Rs 815/share (from Rs 800/share).

CESC’s consolidated profits increased 23.2% yoy to Rs 3.2 bn led by profits of Rs 280 mn reported at Dhariwal compared to losses of Rs 150 mn in 3QFY20. Standalone performance was stable with PAT of Rs 1.8 bn (+3.4% yoy).