MOSL: CESC (Buy)-S/A gen. muted; Noida up on carrying cost recovery
CESC: S/A gen. muted; Noida up on carrying cost recovery
(CESC IN, Mkt Cap USD1.4b, CMP INR760, TP INR957, 26% Upside, Buy)
S/A PAT grew ~2% YoY to INR2.8b (in-line). Sales were up just ~2% YoY to 2.9BU. T&D losses are estimated at ~9%. Consol. PAT was up ~13% YoY to INR3.6b in the quarter on carrying cost recovery at Noida (~INR150-200m). For 1HFY20, PAT was up 8% YoY to INR4.9b.
- Profits at Noida rose YoY to INR790m (v/s est. INR450m) on favorable order leading to carrying cost recovery.
- Distribution franchisees' net loss was slightly higher YoY at INR30m (v/s est. INR20m). This was largely on account of flood-like situation at Kota.
- Crescent and Surya (RE)'s PAT was higher YoY at INR170m (v/s est. INR160m).
- Dhariwal's net loss stood at INR250m. While YoY (INR630m loss in 2QFY19), the loss may appear lower; the company has noted that it is on account of re-classification and possible adjustments in the previous year. Generation at Dhariwal was 14% lower YoY at 504MUs.
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.
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