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ICICI Securities Report
CESC Ltd. reported a revenue of Rs 55 billion, up 21% YoY, Ebitda of Rs 11 billion, up 7% YoY, and profit after tax of Rs 3.8 billion, up 9% YoY. Revenues primarily grew due to higher sales in its Kolkata License Area (+8% YoY) and Noida (+24% YoY) and higher power purchase cost (pass through; plus 44% YoY).
Also, the higher merchant prices have benefitted its subsidiary – Dhariwal. The subsidiary reported a profit of Rs 1.1 billion (versus Rs 720 million in the same quarter previous year). The best news during the quarter was recovery resuming for fuel and power purchase cost.
As a result, cash flow from its distribution asset should improve in FY25E. On the renewables, CESC has taken a number of steps:
signed framework agreement with wind OEMs.
Accelerating the pace of land acquisition for 3GW.
We reiterate 'Buy' with a revised target price of Rs 207.
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