-------- Forwarded Message --------
Subject: CESC: A Victim Of IPL Jinx & Unrelated Diversification ?
Date: Thu, 10 Dec 2015 09:44:26 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
*For CESC, 490-475 May Be A Good Support Zone*
*
*
*As Par Management, Concern Of Cash-Flow *
*On CESC For IPL Is Overdone*
*CMP: 517*
*
*
*Either buy on breakout above 535-540 or wait for dips around 490-475:*
*
*
*TGT: 560-580*-612 (1-6M)*
*
*
*TGT:710-826-860 & 1030 (12-24M)*
*
*
*TSL<470*
Note: Consecutive closing below 470 for any reason, CESC can fall up to
450-425-395* zone in the near term under worst bear case scenario.
Market is not amused about entry of CESC into Pune IPL Team and terming
it as an unrelated & unnecessary investment/ risky diversification for
the power distribution company, which has steady cash-flow from its core
operations so far.
Analysts at Antique are apprehending around Rs.100 cr cash outflow for
this IPL venture on account of buying players and other operational
expenses.
But the CESC management is maintaining that cash-flow outgo may not be
huge considering the overall size of CESC group and on a standalone
basis CESC will not be affected at all. Its another listed group company
(Phillips Carbon Black), which may be affected to some extent for any
net cash-outflow. Even the estimate given by CESC for this IPL venture
may be around Rs.98 cr as the company will pay Rs.32 cr to BCCI (reverse
bidding) and has estimated Rs.66 cr for players buying.
The CEO of CESC although explained that participation in the IPL would
be a reward branding exercise but market is not buying that argument
either, because except Spencer & may be Saraegama, the group does not
have any major consumer fencing business and spending such huge amount
(close to Rs.100 cr over two years ??) on brand building is devoid of
any logic. But there may be some sort of tax savings on account of IPL
investment for the overall group (Phillips Carbon ??).
As par BG metrics & current market parameters (without this IPL fallout
on net earnings)
(on standalone TTM & FWD EPS)
Present median valuation of CESC may be around: 545-560 (FY:15-16/TTM)
Projected fair valuations might be around: 595-625 (FY:17-18/FWD)
SCRIP EPS(TTM) BV(Act) P/E(AVG) Low High Median
200-DEMA 10-DEMA
CESC 52.79 545.26 10 548.28 538.59 543.43 569.44 549.49
CESC 56.25 613.45 10 565.96 555.96 560.96 569.44 549.49
CESC 62.15 690.95 10 594.90 584.39 589.64 569.44 549.49
CESC 68.95 776.35 10 626.60 615.53 621.06 569.44 549.49
*Analytical Charts:*
<http://1.bp.blogspot.com/-vsJ2byvwRaw/Vmj5VNJ-KbI/AAAAAAAAFOI/tJXljuxHVSA/s1600/CESC-09-12-2015.png>
<http://1.bp.blogspot.com/-7qzWFD8TnP8/Vmj5do0pr9I/AAAAAAAAFOQ/lejvbERpxrM/s1600/CESC-FIBB-09-12-2015.png>
<http://3.bp.blogspot.com/-Nr-cvx8sPGs/Vmj5fgfNrMI/AAAAAAAAFOY/S0b7zU6r838/s1600/CESC-WK-09-12-2015.png>
<http://4.bp.blogspot.com/-6m_hIafZmMI/Vmj5hE4UeeI/AAAAAAAAFOg/tbBSLP_gcTA/s1600/CESC-PATTERN-09-12-2015.png>
<http://2.bp.blogspot.com/-NkQwX8-gsY4/Vmj5jmuHfJI/AAAAAAAAFOo/x03l04yHuZA/s1600/CESC-PATTERN-LT-09-12-2015.png>
<http://4.bp.blogspot.com/-uwwFH4O5qt0/Vmj5mCc7y3I/AAAAAAAAFOw/V3Mm3I6xJxo/s1600/CESC-TL-09-12-2015.png>
--
Thanks & Regards,
Asis Ghosh
(asisghosh.blogspot.com)
--
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