CESC ventures seems to be trading at huge discount from book value. Any investor still tracking it?
Yes, let me know if you have any questions
Hi @kashish24,
The huge discrepancy between Price and value is my question. The stock is selling almost 0.3 times BV and similar ratio for Price to Sales. Whats the reason for this huge undervaluation?
Is it only because of the post de-merger sell-off or are thr other hidden risks that u are aware of??
CESC is India’s first fully integrated electrical utility company ever since 1899.
Initially started generating and distributing power in Kolkata and Howrah.
Company’s transmission, and distribution of electrical power business is spread across Kolkata, Greater Noida, Rajasthan and Chandigarh.
Its 2.1-GW thermal capacity is located in West Bengal.
CESC is the sole distributor of electricity within an area of 567sq km of Kolkata, Howrah and adjoining areas and serve 3.4 million consumers which include domestic, industrial, and commercial users.
CESC own & operate two thermal power plants in its licensed area generating 885 MW of power. These are Budge Budge Generating Station (750 MW) and Southern Generating Station (135 MW) within its licensed area.
Apart from this, during the year 2022-23, the Company commissioned supply of 3 MVA power to Fort Gloster Industries Limited by commissioning of 33 kV feeders and 3-Panel 33 kV SBB GIS at consumer’s switchroom.
67 Nos Distribution Transformers (DTs) aggregating 29.81 MVA were added taking installed base to 8786 DTs and 3024 MVA;
CESC commissioned 33kV feeders to provide supply to Joka Receiving Substation of Joka-BBD Bag Metro Corridor of Kolkata Metro LT lines.
To be noted ——CESC maintaining a healthy dividend payout of 44.6%
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I Think the chart shows that the business is entering the stage 2
Can you elaborate a bit more?
Why to pay dividend when there is so much debt, Almost 2500-3000 crores paid in dividend over last 4-5 years while having debt of > 13,000 crores.