Stock analysts are largely positive on CESC, as the company set ambitious plans to double its profit after tax (PAT) by FY30, projecting a compound annual growth rate (CAGR) of approximately 15 per cent.
The management aims to achieve this through significant contributions from each business segment.
ICICI Securities, which attended the RP-Sanjiv Goenka Group Investor Day 2025 this week –where CESC unveiled its ‘Growth Vision 2030’, said the management has outlined an Rs 32,000 crore capex plan; within which Rs 23,000 crore will be earmarked for reewnable energy “(RE) generation capacity, Rs 6,000 crore for distribution assets and Rs 3,000 crore for solar manufacturing over the next five years.
“Apart from building its businesses, CESC aims to win DISCOM bids. UP plans to privatise its DISCOMs due to AT&C losses of over 30 per cent. The DISCOMs have 1.75 crore customers with consumption of ~65BU. Five major bids at UP are expected in the medium term. Retain Buy and target of Rs 204,” ICICI Securities said.
Antique Stock broking said its estimates remain more conservative, factoring in a slower turnaround in Malegaon and more moderate renewable contribution, leading us to forecast 11 per cent PAT CAGR over FY25-28E. It maintained ‘Buy’ rating with a SoTP-based target price of Rs 203 with key potential catalysts, including wins in the upcoming UP discom tenders and securing PPAs for renewable asse.
Emkay Global has reiterated its ‘Buy’ rating on CESC, setting a target price of Rs 225.
CESC is advancing its renewable energy (RE) strategy, with plans to establish a 3.2GW wind-solar hybrid capacity by FY29, scaling up to 10GW by FY32. For the initial 1.2GW capacity, the expected revenue stands at around Rs 12bn. Emkay Global highlighted the company’s clear roadmap for this expansion, expecting the Phase-1 capacity to generate revenue/Ebitda of Rs 3,200/2,900 crore, translating to a strong Ebitda margin of about 90 per cent.
The company is also venturing into the solar module and cell manufacturing sector by setting up a backward integrated 3GW facility over the next two years. Emkay Global noted, “CESC’s strong operating cash flow (OCF) growth will comfortably meet the equity portion of the enhanced capex requirements of approximately Rs 320bn over the next 4-5 years.”
Further, CESC’s RE capacity expansion is progressing steadily, with 3,000 acres already acquired and over 8,000 acres in various acquisition stages for the 1,500MW solar capacity under Phase-1. Connectivity applications have been made for 7.6GW, with approvals secured for 3.8GW. Framework agreements with companies like Inox, Suzlon, and Envision for 3.5GW of wind turbines demonstrate the company’s proactive approach. This strategic alignment ensures that CESC remains on track to achieve its long-term renewable energy goals.
Emkay Global praised CESC’s focus on distribution facilities, stating, “Emkay Global said CESC’s constructive focus on distribution facilities continued.” The company plans to actively engage in upcoming privatisation opportunities, such as those in Uttar Pradesh. Despite challenges in Malegaon, management remains confident of breakeven in profitability within three years, driven by aggressive loss-reduction measures.
In terms of new initiatives, Emkay Global remarked, “Emkay Global said CESC’s foray to set up a fully integrated 3GW solar module and TOPCon cell capacity over the next two years acts as a tailwind and positions the business for growth, especially as the current ALMM List-II contains only two players with cumulative TOPCon nameplate capacity of 3.4GW.”
The recent Supreme Court ruling to liquidate DISCOM regulatory assets over the next three to four years is anticipated to benefit CESC, aligning with cost-reflective principles and potentially improving its regulatory asset base estimated at around Rs 3,700 crore. Emkay Global believes this judicial decision will serve as a favourable tailwind for CESC.
CESC’s current market position is bolstered by strategic expansions and regulatory developments that favour its growth trajectory. The company’s focus on renewable energy and distribution efficiency, combined with strategic partnerships, underscores its commitment to achieving long-term profitability and sustainability goals. These efforts are expected to solidify CESC’s standing in the energy sector, paving the way for future success.