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9/19/10

Buy CESC; target of Rs 568: Motilal Oswal - Moneycontrol.com -

Buy CESC; target of Rs 568: Motilal Oswal - Moneycontrol.com -: "Motilal Oswal is bullish on CESC and has recommended buy rating on the stock with a target of Rs 568 in its September 17, 2010 research report.

“CESC has regulated business, comprising largely of the generation (1,225MW) and distribution assets in Kolkata, generates profits of Rs 3.5 billion+ a year. The regulated equity base (RAB) is Rs 22 billion, up from Rs 17 billion as at end-FY09, driven by the commissioning of the Budge Budge 250MW generation capacity in February 2010. Given that FY11 will be the first full year of operations, we expect net profit from regulated business to increase to Rs 4.2 billion in FY11 and Rs 4.4 billion in FY12. Over FY11-12, these will entail equity funding of Rs 11.8 billion; CESC has cash and liquid investments of Rs 13.5 billion as at March 2010.”"

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