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Power company CESC Ltd on Tuesday (November 12) reported a 1.4% year-on-year (YoY) increase in net profit at ₹353 crore for the second quarter that ended September 30, 2024. In the corresponding quarter of the previous fiscal, CESC posted a net profit of ₹348 crore, the company said in a regulatory filing.
Revenue from operations grew 8% to ₹4,700 crore against ₹4,352 crore in the same quarter in FY24.
At the operating level, EBITDA surged 38.7% to ₹896 crore in the second quarter of this fiscal over ₹646 crore in the year-ago period.
The EBITDA margin stood at 19% in the reporting quarter versus 14.8% year-on-year. EBITDA is earnings before interest, tax, depreciation, and amortisation.
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CESC's bottomline was supported by a significant rise in regulatory income. The company's EBITDA faced pressure from elevated energy costs, while multiple one-off expenses also impacted its operational margins.
Energy costs surged by 55.2% YoY to ₹2,543 crore, reflecting higher prices in fuel and power purchases. However, regulatory income grew 2.6x to ₹689 crore, aiding overall profitability.
In segment-specific performance, CESC's Kolkata distribution business saw an 8% YoY increase in demand, indicating robust growth. Meanwhile, Noida Power reported sales of 1,012 million units (MU) during Q1FY25, marking a 26.4% YoY growth.
The Rajasthan distribution franchises (DFs) remained EBITDA-positive and achieved a 5% YoY increase in consolidated sales. The Malegaon distribution franchise recorded a sales volume of 190 MU, though its losses widened by 27% YoY. Additionally, the Chandrapur Thermal Power Plant (TPP) reported a plant load factor (PLF) of 93.5% for the quarter, highlighting high operational efficiency.
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CESC also made advancements in its renewable energy initiatives, with a pipeline of 3 GW in hybrid renewable projects. The company is preparing to commission a green hydrogen production facility with an annual capacity of 10,500 tonnes in the next three years.
One notable regulatory update was CESC Kolkata distribution’s recovery of the fuel and power purchase adjustment surcharge (FPPAS), which adjusts for fluctuations in fuel and power purchase costs, effective June 2024.
Nuvama has maintained a 'reduce' rating on CESC shares, adjusting the target price to ₹154 from ₹121 apiece. The rating reflects steady Q1FY25 profit after tax (PAT), aided by regulatory deferrals, though it noted a 65% YoY decline in the Rajasthan franchise’s PAT.
Shares of CESC Ltd ended at ₹183.75, down by ₹0.30, or 0.16%, on the BSE.
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