CESC Limited

Utilities — Utilities - Regulated Electric · NSE

₹135.92+₹0.07 (+0.05%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

The 60-second version of CESC Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

CESC Limited, an integrated electrical utility company, engages in the generation and distribution of electricity in India.

IndustryUtilities - Regulated Electric

SectorUtilities

Employees5,289

Annual revenue₹18,570 Cr

How does it make money?

Turns over ₹18,570 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹27 left at the operating level before interest, tax and depreciation. Each of its 5,289 employees supports ₹3.51 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.51 Cr

Who are its competitors?

The closest listed comparisons in its industry are NTPC LTD, POWER GRID CORP. LTD., TATA POWER CO LTD, ADANI POWER LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 10.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.8%

What is the outlook?

12 analysts covering the stock expect revenue to grow about 8.1% and earnings to grow about 12.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+8.1%

Est. earnings growth+12.4%

Analysts12

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +30% while net margin moved -12% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+30%

Margin effect-12%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 1.64x is high — earnings must service borrowings before shareholders see anything
✗ Current ratio of 0.92 — short-term liabilities exceed short-term assets
✓ Free cash flow is positive — the business funds its own capex
✗ Interest cover of only 2.4x — little room if profits dip

Quality vs. Valuation

Company Quality

50/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

81/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

11.6x

3Y Median

15.3x

40 monthly readings · mean 14.6x · range 8.2x–19.4x

Sector Median

20.6x

median of 4 sector peers

🟢Current valuation is approximately 24% below its 3y median of 15.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 44% below the peer median of 20.6x.

vs. its own history

Cheap

15.3x median over 40 months · -24%

vs. sector peers

Cheap

20.6x median of 4 peers · -44%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.1x

PEG

2.46

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 52% over 3 years, from ₹14,263 Cr to ₹21,671 Cr.
🔴High leverageFinancial
Debt/Equity of 1.64x — earnings must service borrowings before shareholders see anything.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.92 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 24% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 44% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 4.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 25%✓ 26.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.4x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 7% a year✓ 9.2% CAGR
Latest reported year was 5.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹141 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹18,017 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.6x

Cheap

Cheap against the generic band

P/B Ratio

1.44x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹11.7

Profitable

Profitable on a per-share basis

ROE

12.3%

Moderate

Moderate capital efficiency

ROCE

10.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.64x

High

High leverage

Revenue Growth (YoY)

5.4%

Modest

Modest growth

Profit Growth (YoY)

3.8%

Modest

Slow profit growth

Dividend Yield

4.41%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹141 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

9.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

11.8%

Average

Average margins

Net Margin

8.2%

Average

Average bottom-line conversion

Current Ratio

0.92

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.42

Defensive

Steadier than the market

52W Range Position

10%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

136.5 / 146.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

43.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹14,246 Cr	₹15,293 Cr	₹17,001 Cr	₹18,570 Cr	+9.2%
EBITDA	₹4,017 Cr	₹4,487 Cr	₹4,613 Cr	₹4,980 Cr	+7.4%
EBITDA Margin	28.2%	29.3%	27.1%	26.8%	—
PAT (Net Profit)	₹1,343 Cr	₹1,376 Cr	₹1,370 Cr	₹1,542 Cr	+4.7%
EPS	₹10.13	₹10.38	₹10.33	₹11.63	+4.7%
ROE	12.3%	12.0%	11.4%	12.3%	—
ROCE	9.7%	9.9%	9.9%	10.0%	—
Total Debt	₹14,263 Cr	₹14,544 Cr	₹17,978 Cr	₹21,671 Cr	+15.0%
Free Cash Flow	₹1,283 Cr	₹1,580 Cr	₹718 Cr	₹141 Cr	-52.1%

🟢 Revenue has grown at 9.2% a year over 3 years.

🟢 EBITDA has grown at 7.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 28.2% to 26.8% over 3 years (-1.4 pts).

🟢 PAT (Net Profit) has grown at 4.7% a year over 3 years.

🟢 EPS has grown at 4.7% a year over 3 years.

🟡 ROE has held roughly flat at 12.3% over 3 years.

🟡 ROCE has held roughly flat at 10.0% over 3 years.

🔴 Total Debt has grown at 15.0% a year over 3 years.

🔴 Free Cash Flow has shrunk at 52.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹46,470 Cr

Total Liabilities

₹33,281 Cr

Cash & Equivalents

₹4,208 Cr

Operating Cash Flow

₹4,057 Cr

Capex

-₹3,916 Cr

Shareholding (proxy)

Institutional Holding

77.2%

Insider Holding

6.3%

Corporate Actions

Next Earnings

22 Oct 2026

Dividend Rate

₹6

Ex-Dividend Date

19 Aug 2026

Analyst Consensus

Recommendations

12 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹205

+50.8% vs CMP

Target Range

₹145 – ₹250

Peer Comparison

Company	P/E	ROE
NTPC LTD	11.0x	13.7%
POWER GRID CORP. LTD.	14.6x	15.8%
TATA POWER CO LTD	29.3x	9.8%
ADANI POWER LTD	26.5x	21.9%

Recent News

1 positive3 mixed2 general

Suzlon Energy vs Inox Wind vs NTPC vs CESC vs Tata Power: Best Expert Pick In Power Utility Segment Revealed!

Goodreturns, 15 Oct

CESC Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

CESC Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Simply Wall Street, 16 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

CESC - 8 small, midcap stocks with upside potential of up to 50%. How many are in your portfolio?

The Economic Times, 17 Oct

CESC Q1 Results: Net Profit Rises 3% YoY, Dividend Declared. Check Record Date

NDTV Profit, 13 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Adani Energy vs CESC vs Tata Power vs NTPC vs Power Grid: Which stock has more upside? Target price by PL Capital

Livemint, 18 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Growth · Profitability · Risk

WeakFinancial Health

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑