Firstcall Research has recommended 'Buy' on CESC with a target price of Rs. 620 as against current market price of Rs 558 in its report.

Commenting on the investment rationale, the stock broker said, "For the 4th quarter of the financial year 2015, CESC has posted Net sales of Rs. 14,160 million, an increase of 13.64% y-o-y as against Rs. 12,460 million in the corresponding quarter of the previous year. For the same period net profit after tax grew by just 0.41% y-o-y of Rs. 2440 million as compared to Rs. 2,430 million for the Mar quarter of FY14. The company has reported an EBITDA of Rs. 4,810 million, grew by 2.12% over prior period of previous year. Shown a Profit before tax (PBT) at Rs. 2920 million in Q4 FY15 compared to Rs. 3,080 million in Q4 FY14.

At the current market price of Rs. 558, the stock P/E ratio is at 9.50 x FY16E and 8.70 x FY17E respectively.  Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.58.72 and Rs.64.13 respectively.  Net Sales and PAT of the company are expected to grow at a CAGR of 7% and 8% over 2014 to 2017E respectively.   We recommend 'Buy' in this particular scrip with a target price of Rs. 620 for medium to long term investment."

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