CESC shares get an upgrade from Nuvama with 20% upside potential

Shares of CESC Ltd. gained on Wednesday, September 24, as brokerage firm Nuvama upgraded the stock to "buy" from its earlier stance of "hold", and also raised its price target. The stock though, has cooled off from opening highs.

CESC's price target has been raised to ₹200 from ₹187 earlier, which implies an upside potential of 20% from Tuesday's close.

Nuvama said CESC's renewable energy growth plans have solidified. The company aims to double its profit after tax (PAT) to ₹2,800 crore over the financial years 2025-30 through:

• The addition of 1.2 and 3.2G GW renewable energy capacity by financial year 2027 and 2029 respectively and then go on to 10 GW by financial year 2032. Out of this, 3.8 GW is approved and the remaining has been applied for in states with a high renewable energy potential.


• New Solar Manufacturing initiatives with a 3 GW cell and module capacity each by financial year 2028. These remarks were also highlighted first to CNBC-TV18 by RPSG Group Chairman Sanjiv Goenka last week.

"While CESC's current market price captures the recent tariff hikes, valuations are not factoring in the strong renewable energy pipeline and solar manufacturing initiatives," Nuvama wrote in its note. Additionally, a potential order from a UP discom could add to the growth opportunity.

Of the 11 analysts that have coverage on CESC, 10 have a "buy" rating and one has a "sell" rating.

CESC shares were trading 0.3% higher at ₹167.4 apiece on Wednesday. The stock has declined 10% this year, so far.

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