CESC (CESC IN) – Q4FY26 Result Update – Good quarter, eyeing renewable commissioning – BUY
Published on 07 May 2026
CESC delivered a strong close to FY26, with consolidated PAT growing 13% YoY to Rs 16.2 bn in FY26 and 18.9% YoY to Rs 4.6 bn in Q4FY26, confirming the double-digit earnings recovery that was anticipated through the year - a meaningful re-acceleration from the low single-digit PAT CAGR of the past 3–5 years. Kolkata distribution achieved an all-time low T&D loss of 6.11%, and Malegaon's T&D losses improved ~340 bps to 36.3% for FY26, reflecting the sustained impact of loss-reduction initiatives across the franchise. Regulatory income for FY26 stood at Rs 9 bn (consolidated) vs Rs 12.5 bn in FY25 - still lower on a full-year basis. On renewables, CESC's subsidiary Purvah Green continues to target 3.2 GW by FY29E and recalibrated addition plans over FY26-28E. For the plan it has incurred capex of Rs 40bn (for the under implementation pipeline of 2.4GW) and 300MW is in commissioning stage. Stock currently trades at 1.7x PBV, given the earnings trajectory and renewable optionality; we maintain BUY with an revised SoTP-based target price of Rs 216 (earlier Rs 204) factoring higher valuation for Kolkata discom (improved demand, capex and faster recovery of regulatory asset) and revised renewable addition plans. Key catalysts accelerating execution in the renewables business and remain potential discom privatisation wins.
