CESC (CESC)
Slow GrowerFairStock Score: 50/100 — MIXED
Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 1/1
Key Financials
| Current Price | ₹167.83 |
| Market Cap | ₹22,247.05 Cr |
| P/E Ratio | 14.28 |
| ROCE | 11.23% |
| ROE | 12.55% |
| Dividend Yield | 3.73% |
| Profit Growth | 17.8% |
| Debt/Equity | 1.64 |
| Sales Growth | 5.6% |
| Free Cash Flow | ₹-431 Cr |
| Promoter Holding | 52.11% |
| 52-Week Range | ₹138.12 — ₹199.89 |
| Sector | Power |
| Book Value | ₹94.47 |
Strengths
- Integrated power utility with essential, recurring demand
- Promoter holding of 52.11% aligns ownership with minority shareholders
- Dividend yield of 3.79% provides income support
- Piotroski F-Score of 8/9 indicates decent operating fundamentals
- Sales growth of 11.14% shows topline momentum
Concerns
- Free cash flow is negative at -₹431 Cr, weak cash conversion
- Debt/Equity of 1.48 and Altman Z-Score of 1.33 point to balance sheet stress
- EV/EBITDA of 298.24 is extremely elevated, raising earnings quality questions
- Stock trades above Graham Number of ₹150.49, offering negative margin of safety
AI Analysis
Whenever I look at a business, I ask if it has a durable advantage and whether the price leaves room for error. CESC is an integrated power utility, and that provides a natural franchise-like quality: electricity is essential, and with 52.11% promoter holding, interests are aligned. The trailing numbers show steadiness: 12.27% ROE, 11.23% ROCE, and a 3.79% dividend yield while the stock trades at ₹180.18. The latest quarter sales of ₹4,005 Cr and net profit of ₹304 Cr are respectable for a company of this size. Sales grew 11.14%, and five-year revenue CAGR of 7.89% suggests slow, reliable expansion. But I do not buy a business on charm alone. The margin of safety is missing: with a Graham Number of ₹150.49, I am being asked to pay above what a conservative formula would say. Book value is ₹90.60, so the market at 1.99 times book is already paying for growth. What concerns me more is the financial plumbing. Debt/equity of 1.48, negative free cash flow of -₹431 Cr, and an Altman Z-Score of 1.33 are not signs of a fortress balance sheet. The Piotroski score of 8/9 is encouraging for fundamentals, but the EV/EBITDA of 298.24 suggests operating earnings are thin relative to enterprise value. This looks like a slow-growing, dividend-paying utility, not a compounder. At P/E of 14.23, the market is not crazy, but without better cash conversion and lower debt, I would want a meaningful discount to book and Graham value. For now, it is a watch-and-wait situation.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer