BENGALURU (Reuters) – India’s CESC, a power generation and distribution company, reported an increase in second-quarter profit on Tuesday, due to fewer leaks during distribution and bill collection.
The Kolkata-based company said its consolidated net profit rose 1.4% year-on-year to 3.53 billion rupees ($41.8 million) for the quarter ended Sept. 30.
Revenue from operations rose 8% to 47 billion rupees.
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KEY CONTEXT
The country’s power demand grew only 1.1% year-over-year in the September quarter, compared with a 9.7% increase during the first half of the year, as above-normal rainfall resulted in lower temperatures.
That led to Tata Power missing profit expectations for the quarter.
However, according to Elara Capital, CESC’s distribution business likely benefited from lower aggregate technical and commercial (AT&C) losses.
AT&C losses are a combination of energy losses, including due to theft and billing inefficiency, as well as commercial losses, which include payment defaults and collection inefficiency.
Torrent Power is due to report its quarterly results on Wednesday.
PEER COMPARISON
Valuation Estimates (next 12 Analysts’ sentiment
(next 12 months)
months)
RIC PE EV/EBI Revenue Profit Mean # of Stock to Div
TDA growth (%) growth (%) rating* analysts price yield
target** (%)
CESC 13.08 8.90 9.03 12.46 Buy 9 0.89 2.46
Torrent Power 30.88 14.97 11.04 20.81 Hold 8 1.16 0.94
NTPC 16.35 10.11 7.22 9.06 Buy 17 0.90 1.73
Tata Power 30.71 14.16 9.96 20.58 Hold 20 0.99 0.46
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG Data
— $1 = 84.4025 rupees
(Reporting by Anuran Sadhu in Bengaluru; Editing by Savio D’Souza)
