Mirae Asset Sharekhan has maintained its bullish stance on CESC Ltd, advocating a Buy recommendation with a price target of Rs 195. The Kolkata-based power major, with its deep roots in electricity generation and distribution, is strategically positioned for accelerated growth. Supported by aggressive renewable expansion plans and critical improvements in operating margins, the report highlights positive earnings momentum. Despite certain risks — including delays in renewables and sustained subsidiary losses — CESC’s valuation remains compelling and its outlook resonant with investor optimism.

Sharekhan Reiterates BUY; Price Target Sees Upside

Mirae Asset Sharekhan, renowned for its robust equity research, recommends a BUY on CESC Ltd, pegging the target price at Rs195. The current market price stands at Rs162, implying substantial upside potential. The research underscores a Sum-of-the-Parts (SoTP) assessment, with growth catalysts rooted in renewable expansion and power distribution reforms.

Sector Dynamics: Power Demand Surges, Renewables Eclipse Conventional

India’s power sector is witnessing demand outstripping GDP growth, propelled by aggressive national targets for clean energy. The government’s resolve to achieve 500GW of renewables by 2030 fosters a transformative environment, primed for modernization and privatization. Grid enhancements and the proliferation of smart metering schemes further buttress sectoral performance.

CESC—A Powerhouse With Dominant Distribution Footprint

Founded in 1899, CESC operates as a fully integrated power utility. The company is the exclusive distributor over 567sq.km in Kolkata and Howrah, servicing 3.6million consumers. Key assets include three thermal power plants (1,485MW generation), the Chandrapur independent power plant (600MW), and Crescent Power (40MW). The enterprise recently expanded into Chandigarh, further fortifying its pan-India reach.

Financial Performance: Steady Earnings With Margins Poised to Rebound

Standalone PAT rose 9.9% year-on-year to Rs211crore, primarily due to improved tax efficiency and greater other income. In Q1FY26, consolidated PAT climbed 2.4% y-o-y to Rs387crore, abetted by Noida business gains, despite persistent Malegaon losses. Operating profit margin (OPM) increased to 20.1% in Q1FY26, reflecting disciplined cost controls.

Valuation Table—Key Metrics (Rs cr)

Strategic Catalysts: Renewables, Tariff Hikes and Distribution Turnaround

With an ambitious plan to add 3.2GW of renewable capacity — split between 1.5GW solar and 1.7GW wind — by FY29, CESC is set to ride India’s green energy wave. The capex, ranging between Rs12,000–Rs13,000crore over 4–5years, is backed by PPAs and connectivity approvals for high-wind, high-solar states. Recently, a 5.7% tariff hike in Kolkata enhances cash flows, while turnaround efforts in Rajasthan and Malegaon distribution franchises promise to shore up profitability.

Subsidiaries—Mixed Bag But Noida Shows Resilience

Noida Power, with a 2.8% y-o-y revenue lift and a 35.1% jump in PAT, stands out amongst key subsidiaries. Haldia Energy posted stable results, whereas Dhariwal Infrastructure recorded moderate growth. Malegaon remains in the red, with losses widening slightly — the company is undertaking aggressive measures to curtail transmission and distribution losses.

Risk Factors: Delay in Renewables, Distribution Losses Remain Key Concerns

The foremost risks revolve around potential postponements in renewable commissioning and continued losses in distribution franchises, particularly Malegaon. Sustained underperformance could impair envisaged earnings momentum and depress valuations.

Shareholding and Investor Information

Promoters retain a robust 52.1% stake, with institutional interest from FIIs and DIIs at 10.9% and 25.4%, respectively. Free float remains healthy at 63.5crore shares. The stock has oscillated between Rs213 and Rs119 over the past 52 weeks, currently trading close to its medium-term average.

Investor Takeaway & Actionable Levels

BUY at Rs162, targeting Rs195 in the medium-term. The stock’s key support lies at Rs130–Rs140, with resistance anticipated near Rs190–Rs205. Investors are advised to monitor progress on renewables and distribution franchise turnarounds, as both are pivotal to further upside.

Conclusion: CESC Stays on Growth Track; Mirae Asset Sharekhan Maintains Conviction

Backed by management’s strategic vision and a diversified footprint, CESC is well-placed for secular expansion. The research house’s unchanged BUY call, coupled with a Rs195 target, reflects conviction in the company’s fundamentals and sectoral tailwinds. While risks persist, the upside potential makes CESC a compelling bet for investors seeking exposure in India’s dynamic power sector.