CESC (CESC IN) – Q2FY27 Result Update – Transmission to address re-curtailment – BUY
Published on 06 Nov 2026
CESC reported Q2 PAT (consolidated) of Rs 4.4 bn (-2% YoY) is lower than our estimate by 7%, This is led by 1) Purvah energy (renewable subs) loss of Rs 280 mn vs Rs 30 mn YoY. CESC has started providing renewable business segmental details from Q2FY27, 2) tax rate of 25% vs 21% YoY and continuation of T&D losses at Malegaon at 36% stagnant QoQ. CESC has guided permanent transmission for the asset from Q4FY27 and 1.4GW renew asset to get acquired by Nov-26. For FY29E capacity target of 4.5GW till Date PPA is signed for 4.3GW (incl 1.4GW to be acquired capacity). Malegaon loss after tax at Rs 420 mn vs loss of Rs 430 mn QoQ. Reflecting the hurdles in renewables and the weak Malegaon performance, we cut our FY27E/FY28E EPS estimates by 3% each and lower our target price to INR 195 (from INR 204), while retaining our BUY rating. Stock trades at 1.2x FY28E PBV with dividend yield of 4.6%. Near term trigger transmission line for 300MW of renewable capacity in Q4FY27, completion of the Renew acquisition by mid-November 2026.
