Saturday, October 8, 2011

RESPONSE TO READER'S QUERY: @ANON 6/10/2011; CESC LTD

TECHNICALS indicate that the Stock currently seems to be troughing out. A closer look at the 2 year Price Charts indicates a good support at 252 levels; on the upside, the first resistance is at 281 and then at 297. Confirmation of uptrend only above 307 levels.

Perusal of the FUNDAMENTALS indicates a stable but not meteoric outlook as would be largely expected of a Power Utility. However the kicker, if one might call it that, is the fact that in addition to Generation, the Distribution aspect as well as Coal-sourcing advantages are also built in as opposed to a plain vanilla Power Utility. Topline and Bottom-line expected growth at around 10% and 8% CAGR over the next couple of years and the additional impetus likely to come from the Retail vertical (Spencer's). Moreso the factor that swings it in favour of the Scrip is the attractive valuations of about 5.8x FY13E at CMP 266.

Therefore, in my book, the Scrip is a Buy in the range 250-270 and all dips in case of Market panic.
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2 comments:

  1. angelOctober 14, 2011 at 10:20 AM

    Great blog nice n useful information about Indian Stock marekt and Equity market , it is very helpful for me , I realy appreciate thanks for sharing. I would like to read more information thanks.

    ReplyDelete
  2. SANJAY M.October 14, 2011 at 5:57 PM

    Many thanks angel, please let me know any stock queries that you would like to discuss etc and I will take them up for analysis.

    ReplyDelete

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