More gains ahead for CESC

Demerger of the company's four businesses will lead to further re-rating

The CESC’s scrip has been a market outperformer in 2017, more specifically from mid-May. 

According to the Street, the company’s announcement to demerge its business into four entities — power distribution, generation, retail and other ventures (to be completed by October 1) — would unlock value.

So far, CESC’s diversification was a key overhang. It also led to stronger businesses such as power distribution getting lower valuation multiples, analysts said. The demerger will streamline operations and enhance focus on each business, besides allowing them to command the value they deserve.

For instance, the power distribution business (which contributes over half