CESC shares fall 3%; Nomura maintains ‘neutral’ view
ETMarkets.com|
Updated: Nov 16, 2017, 11.40 AM IST
NEW DELHI: Shares of CESC slipped as much as 3 per cent in morning trade on Thursday.
According to Nomura, Uttar Pradesh Electricity Regulator (UPERC) rejecting the 200 megawatt (MW) power purchase agreement (PPA) between CESC's unit, Dhariwal Infrastructure Ltd (DIL), and Noida Power Co (NPC) is a “setback” for the firm.
DIL and NPC signed the long-term PPA during the second quarter of FY18, targeting supply from a largely idling 300 MW unit, Nomura said.
The Japanese brokerage firm further added that if the 300 MW unit remains idle for another 3 years, the CESC stock fair value would drop by 3-4 per cent.
“We think UPERC's non-approval of the PPA with NPC is certainly a setback, and it diminishes the earnings turnaround visibility of the project," Nomura said.
Nomura maintained “Neutral” on CESC with a target price of Rs 948.
The scrip was trading 1.66 per cent down at Rs 997.15 around 11.05 am (IST). Shares of the company opened at Rs 1007.10 and touched a high and low of Rs 1019.90 and Rs 982.30, respectively, in trade so far. Benchmark BSE Sensex was up 149 points, or 0.46 per cent, at 32,909 at around the same time.
The stock had hit 52-week high of Rs 1,079.70 on September 20, 2017 and 52-week low of Rs 555.45 on November 24, 2016.
According to Nomura, Uttar Pradesh Electricity Regulator (UPERC) rejecting the 200 megawatt (MW) power purchase agreement (PPA) between CESC's unit, Dhariwal Infrastructure Ltd (DIL), and Noida Power Co (NPC) is a “setback” for the firm.
DIL and NPC signed the long-term PPA during the second quarter of FY18, targeting supply from a largely idling 300 MW unit, Nomura said.
The Japanese brokerage firm further added that if the 300 MW unit remains idle for another 3 years, the CESC stock fair value would drop by 3-4 per cent.
“We think UPERC's non-approval of the PPA with NPC is certainly a setback, and it diminishes the earnings turnaround visibility of the project," Nomura said.
Nomura maintained “Neutral” on CESC with a target price of Rs 948.
The scrip was trading 1.66 per cent down at Rs 997.15 around 11.05 am (IST). Shares of the company opened at Rs 1007.10 and touched a high and low of Rs 1019.90 and Rs 982.30, respectively, in trade so far. Benchmark BSE Sensex was up 149 points, or 0.46 per cent, at 32,909 at around the same time.
The stock had hit 52-week high of Rs 1,079.70 on September 20, 2017 and 52-week low of Rs 555.45 on November 24, 2016.
