CESC - Fundamental Analysis: Financial Health & Valuation

📈 Positive

• ROCE of 9.95% and ROE of 7.97% — steady return metrics for a utility company.
• EPS of ₹6.36 — supports valuation and earnings visibility.
• Quarterly PAT growth of 11.0% — consistent operational momentum.
• Dividend yield of 3.36% — attractive for income-focused investors.
• MACD positive at 4.32 and RSI at 59.5 — neutral to bullish technical indicators.
• FII and DII holdings increased — signals institutional confidence.
• Trading above DMA 50 and DMA 200 — confirms technical strength and trend support.

⚠️ Limitation

• P/E ratio of 28.2 vs industry average of 25.1 — slightly overvalued.
• PEG ratio of -90.9 — valuation not supported by earnings growth.
• Book Value of ₹77.2 vs current price of ₹180 — high P/B ratio.
• Debt-to-equity ratio of 1.12 — elevated leverage, typical for utilities but worth monitoring.
• Volume below average — may indicate short-term cooling in market interest.

📉 Company Negative News

• Stock corrected ~11.8% from its 52-week high of ₹204.
• PEG ratio distortion suggests caution on growth expectations.

📢 Company Positive News

• Q2 PAT rose to ₹242 Cr from ₹211 Cr — steady sequential growth.
• Strong dividend payout and consistent profitability attract long-term investors.
• Stock up 71.5% over the past year — reflects investor confidence and sector resilience.

🏭 Industry

• Power and utility sector benefits from rising energy demand and infrastructure expansion.
• Industry P/E of 25.1 — CESC trades slightly above, reflecting its stable earnings and dividend profile.
• Sector faces regulatory risks and capital intensity challenges.

🧾 Conclusion

• Business Model: Integrated power utility with operations in generation, transmission, and distribution across key regions.
• Competitive Advantage: Established infrastructure, regulatory alignment, and consistent cash flows.
• Entry Zone: ₹165–₹175 — near DMA 200 and technical support.
• Long-Term Holding: Suitable for conservative investors seeking stable returns and dividend income with a 3–5 year horizon.