Sanju Verma, ED & Hd-Instl Biz, HDFC Securities is of the view that one can bet on CESC with target of Rs 753.
Verma told CNBC-TV18, "I am not sure of PTC but NTPC on a relative basis given the fact that it has dropped from its peak, yes value has emerged but on a standalone basis it still continues to look pretty expensive. If I may take the liberty of digressing if you have to look at power generation EPC companies I would go and place my bets on something like a CESC. In fact we have just released a report today with a pretty aggressive price target of Rs 753 which is very achievable. I cant think too many companies which are trading at about 16 to 17 times FY09 and FY10 with EBITDA margins in the region of 25% with an equally ambitious capex and mind you CESC has more to it than being just another power company."
She further added, "If there is a retail angle to it as well. Spenser retail has got merged into CESC. Spenser Retail has about 312 stores in India with a tradable area of 1 million sq feet and 1 million tradable area in terms of square feet will be added to the company for the next three years every single year. So it is a company with a mix of power a bit of land bank story a bit of a retail angle to it. I don’t know if diversified conglomerates are necessarily the favour of the season. but having said that the fact of the matter is that within the power space you have to be very discerning."
"So my top picks would be CESC. NTPC to some extent but more in importantly I would certainly go and buy something like an Alstom Projects which is also corrected very sharply and it offers excellent value at current levels."
Source: Moneycontrol.com
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