CESC Ltd, the RPSG-Group backed utility arm is scheduled to announce its results for the three months and nine months ended on December 31, 2024 later today. The company board, in its meeting later today, may also consider and approve interim dividend for its shareholders.
Brokerage firms are expecting it to report a decent set of performance in the third quarter of the ongoing financial year. On the face of it, its earnings may appear weak on a quarter-on-quarter (QoQ) comparison, but on a year-on-year (YoY) basis, the growth is penciled in double digits.
Analysts expect that rise in demand for power in distribution circles of the company and the reduction of losses shall be the key for its balance sheet. Beside that, CESC's focus in the renewable energy space shall also boost the earnings in the coming years. On the other hand, tariff hikes in its vast distribution network may also aid its earnings.
Antique Stock Broking sees CESC's revenue to rise 9 per cent YoY but fall 14 per cent QoQ to Rs 4,146.4 crore in the December 2024 quarter. Ebitda is likely to come in at Rs 992.1 crore, up 9.5 per cent YoY but down marginally on sequential basis. Net profit is pegged at Rs 311.9 crore, up 11 per cent YoY but a 11.6 per cent fall on a subsequent quarter basis.
"CESC has reduced its dependence on regulatory income and did well operationally in the previous quarter. Growth will be driven by power demand growth in its distribution circles and the reduction T&D losses. The other catalyst remains the renewable generation business with timely execution of its capacity addition program. Generation increase in Dhariwal/Haldia is strong at 53 per cent/55 per cent YoY in Q3FY25," it Antique added.
Shares of CESC Ltd settled at Rs 170.05 on Thursday, falling 2.47 per cent for the day. The company commanded a total market capitalization close to Rs 22,550 crore at its previous close.
Elara has retained its positive outlook on CESC for its strategic shift towards renewable energy. It expects the company to clock a revenue of Rs 3,665.8 crore, falling 22 per cent YoY but rising 13 per cent YoY. Ebitda is seen at Rs 521.2 crore, rising more than 50 per cent YoY, while net profit may come in at Rs 315.6 crore, up 5 per cent YoY but down 15.4 per cent QoQ.
"CESC will post healthy earnings on improved performance from its distribution business on lower AT&C losses. It is foraying into the renewable energy business, which is a low-cost option. It has plans to develop a 3.2GW solar wind-hybrid renewable project in the next three years. It expects 1GW of RE to be commissioned by March 2026, with an additional 1GW to be commissioned in each of the following years," Elara added. It currently has a 'buy' rating on the stock with a target price of Rs 228.
B&K Securities pencils CESC's revenue at Rs 3,658.6 crore falling 22 per cent on a quarter on quarter basis, but up 12.8 per cent YoY. Ebitda margin is penciled at 23.1 per cent, rising close to 1240 basis points. Net profit is likely to come in at Rs 310 crore, down 17 per cent QoQ basis, but up 3 per cent on yearly comparison.
"CESC is moving with the right direction towards new capacity in green energy that will bring down its reliance on outsourced energy for its distribution areas and dependence on tariff hike, thus improving earnings. Growth is expected in earnings due to YoY growth in demand in distribution circles and collection of FPPAS (Fuel & Power Purchase Adjustment Surcharges)," it said.