External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>We have revised our TP upwards to INR1,011 (vs INR769 earlier), factoring in improved performance in the standalone business (with tariff approval from WBERC), depleting losses in DF, turnaround in the Dhariwal project, attractive valuation (0.9x FY23BV and 7.0x FY23PE consolidated), and high dividend yield (6%). CESC Q4FY21 result highlights recovery in demand and depleting losses. Volume in standalone business increased 4% YoY, while T&amp;D; losses in FY21 declined to 8.35% vs 8.9% YoY. This led to 9.6% YoY increase in the companys standalone PAT.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We have revised our TP upwards to INR1,011 (vs INR769 earlier), factoring in improved performance in the standalone business (with tariff approval from WBERC), depleting losses in DF, turnaround in the Dhariwal project, attractive valuation (0.9x FY23BV and 7.0x FY23PE consolidated), and high dividend yield (6%). CESC Q4FY21 result highlights recovery in demand and depleting losses. Volume in standalone business increased 4% YoY, while T&amp;D; losses in FY21 declined to 8.35% vs 8.9% YoY. This led to 9.6% YoY increase in the companys standalone PAT.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CESC (4QFY21): Loss decline, strong CF make valuation attractive. Maintain BUY

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>Dhariwal turns profitable, performance of DFs to improve CESC's 4QFY21 result highlights a modest recovery in the standalone business. Volumes in the standalone entity improved, but grew just 6% YoY on a low base. Standalone PAT rose 8% YoY, while consolidated PAT fell 4%, led by lower profit at Dhariwal and Crescent and Surya. Dhariwal has turned profitable, and DFs are showing signs of improvement. CESC's integrated business in Kolkata generates a high RoE and strong cash flows.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Dhariwal turns profitable, performance of DFs to improve CESC's 4QFY21 result highlights a modest recovery in the standalone business. Volumes in the standalone entity improved, but grew just 6% YoY on a low base. Standalone PAT rose 8% YoY, while consolidated PAT fell 4%, led by lower profit at Dhariwal and Crescent and Surya. Dhariwal has turned profitable, and DFs are showing signs of improvement. CESC's integrated business in Kolkata generates a high RoE and strong cash flows.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Modest recovery in the standalone business

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The Indian mutual fund industry has assets of almost INR 5 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap and Small Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks.</p><p>The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.</p><p>In the upcoming recategorization in January 2021, we see 6 stocks moved from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 12 stocks are expected to move from the small cap segment to the mid cap segment with the same number moving the other way. There are quite a few IPOs that will join the small cap list, with just 1 joining the large cap list and 1 joining the mid cap list.</p><p>Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.</p>

The Indian mutual fund industry has assets of almost INR 5 trillion across Multi cap, Large Cap, Large and Mid Cap, Mid Cap and Small Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.In the upcoming recategorization in January 2021, we see 6 stocks moved from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 12 stocks are expected to move from the small cap segment to the mid cap segment with the same number moving the other way. There are quite a few IPOs that will join the small cap list, with just 1 joining the large cap list and 1 joining the mid cap list.Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

India: AMFI Stock Categorization Changes to Drive Active Portfolio Churn

India

CESC Limited generates and supplies electricity in and around Kolkata. The Company also provides consultancy services for setting up power plants and for erecting transformers and electrical equipment.

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CESC Ltd (CESC IN)

CESC (4QFY21): Loss decline, strong CF make valuation attractive. Maintain BUY

We have revised our TP upwards to INR1,011 (vs INR769 earlier), factoring in improved performance in the standalone business (with tariff approval...

HDFC Securities

Modest recovery in the standalone business

Dhariwal turns profitable, performance of DFs to improve CESC's 4QFY21 result highlights a modest recovery in the standalone business. Volumes in...

Motilal Oswal

CESC (4QFY21): Loss decline, strong CF make valuation attractive. Maintain BUY

We have revised our TP upwards to INR1,011 (vs INR769 earlier), factoring in improved performance in the standalone business (with tariff approval...

HDFC Securities

Modest recovery in the standalone business

Dhariwal turns profitable, performance of DFs to improve CESC's 4QFY21 result highlights a modest recovery in the standalone business. Volumes in...

Motilal Oswal

India: AMFI Stock Categorization Changes to Drive Active Portfolio Churn

The reclassification of stocks to large, mid and small cap will set off a churn in mutual fund portfolios where historically stocks migrating...

Brian Freitas

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