Prabhudas Lilladher has issued a buy rating on CESC with a target price of ₹220 in its research report dated August 14, 2026. According to the brokerage's assessment, the stock remains attractively valued at approximately 12x FY28E EPS with an expected 15% EBITDA CAGR over FY26-28E.
The company reported consolidated PAT of ₹4.2 billion for Q1, representing a 4% year-on-year growth, though this was 7% below estimates primarily due to higher losses at Malegaon. As reported by Prabhudas Lilladher, the Malegaon loss widened to ₹430 million from ₹170 million quarter-on-quarter, with transmission and distribution losses at 36% versus 33% QoQ. Standalone PAT grew 4% YoY, with Rajasthan Discoms continuing strong performance reporting PAT of ₹190 million compared to ₹80 million YoY, while Noida PAT grew 4% YoY to ₹520 million.
CESC has significantly raised its FY29 renewable capacity target to 4.5GW from 3.2GW earlier, following the proposed acquisition of ReNew's 1.4GW operational renewable portfolio, which is expected to close by October 2026. According to the brokerage report, of the 4.5GW FY29 target, PPAs for 4.3GW have already been signed, including the acquired capacity, while transmission availability has been secured for planned FY29 commissioning.
The company is acquiring 1.4 gigawatt-peak of solar power plants from Renew Solar Power, marking a significant expansion in its renewable energy portfolio. This strategic acquisition is expected to accelerate CESC's growth trajectory while providing dual benefits of stock rerating and enhanced renewable energy generation capabilities.
Prabhudas Lilladher has incorporated the acquisition in FY27/28E estimates, resulting in a 6% upward revision to EBITDA estimates and raising their SOTP-based target price to ₹220. The brokerage maintains its bullish outlook on the stock, citing the company's strong renewable energy expansion strategy and attractive valuation metrics, with the scale-up of renewable power generation capacities expected to accelerate CESC's overall growth trajectory.
