MOSL: CESC (Buy)-Lower T&D losses drive performance-dividend raised
CESC: Lower T&D losses drive performance; dividend raised
(CESC IN, Mkt Cap USD1.3b, CMP INR692, TP INR800, 16% Upside, Buy)
CESC's standalone (S/A) PAT grew ~16% YoY to INR1.8b (our estimate: INR1.5b) in 3QFY19 on account of lower T&D losses and interest cost.
- Sales in the Kolkata distribution circle declined 2.1% YoY to 2.3BU, given the strong base (increased 12% YoY in 3Q last year). Revenue was flat YoY at INR17.1b.
- T&D losses declined 200bp YoY to 9.8%.
- Power exports stood at 135MU, as against 212MU in the year-ago period.
- EBITDA, including rate regulatory item, increased 6% YoY to INR4b (in-line).
- Depreciation was flat YoY at INR1.1b.
- Finance cost declined 3% YoY/QoQ to INR1.2b.
Haldia - Operated at PLF of 88.2% v/s 87.2% in the year-ago period.
Dhariwal - Operated at PLF of 72.8% v/s 37.3% in 3QFY18. PLF improved on short-term PPA with Maharashtra for 187MW. The PPA has ended in Jan'19, but we believe that, given the favorable economics, it will be soon extended.
CESC is engaged in the business of generation and distribution of electricity within the licensed area of 567 sq. km in the city of Kolkata and adjoining areas and does not operate in any other reportable segment. The peak power demand in the licence area is now approximately 1,460 MW, which is met through CESC's internal generation capacities as well as through power purchased from the state and national grid. Power demand, however, fluctuates based on seasonality and the time of the day; the maximum demand for power is usually during the evening hours, with less power needs during rest of the day. The combined generating capacity of Co.'s four plants is 975 MW.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.