MOSL: CESC (Buy)-Standalone ops gain from higher demand; subs weak; FCF generation increasing rapidly
CESC: Standalone ops gain from higher demand; subs weak; FCF generation increasing rapidly; Reiterating Buy
(CESC IN, Mkt Cap USD1.4b, CMP INR763, TP INR910, 19% Upside, Buy)
Standalone (S/A) PAT grew by a healthy ~18% YoY to INR2.2b (our estimate: INR1.9b), led by higher sales (up ~8% YoY to 3.1BU) due to strong demand (likely because of seasonal factors). T&D losses are estimated to have remained steady at ~9-10%. CESC has started reporting consol. quarterly performance from this quarter. Consol. PAT was up ~9% YoY to INR2.3b in 1QFY20.
- Haldia's PAT was down 7% YoY to INR760m. Generation was lower by 5% YoY to 1,058MU.
- Dhariwal's net loss was unchanged YoY at INR240m, despite generation declining by ~10% YoY to 850MU. Dhariwal benefited from short-term contracts at good prices given the election period. However, the lack of tolling arrangement with Maharashtra (ended in Jan'19) offset the gains.
- Cresent and Surya (RE)'s PAT was down from INR210m in the year-ago period to INR30m due to maintenance shutdown at Cresent. This should normalize from 2Q-3Q.
- Distribution franchisees' net loss was unchanged YoY at ~INR0.5b.
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.