BENGALURU (Reuters) -India’s CESC, a power generation and distribution company, reported a fall in fourth-quarter profit on Thursday, hurt by a jump in tax expenses amid higher power demand.
The company’s consolidated net profit fell 6.8% year-on-year to 3.73 billion rupees ($43.6 million) for the three months ended March 31.
CESC’s total tax expenses jumped to 810 million rupees from 40 million rupees a year ago. The company’s profit before tax rose 11.2%.
Revenue from operations climbed 14.5% to 38.77 billion rupees.
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KEY CONTEXT
Power demand increased steadily during the January-March period as above-normal temperatures led to higher electricity usage.
Analysts at Elara Capital had expected a boost to CESC’s fourth-quarter revenue due to increased power generation and reduced distribution losses. The company’s distribution segment likely benefited from lower aggregate technical and commercial (AT&C) losses, the brokerage added.
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.
Peer Tata Power reported a surge in fourth-quarter profit driven by strong power demand, while Torrent Power’s profit more than doubled on lower costs.
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 16.21 8.30 5.55 11.30 Buy 9 0.80 2.74
Torrent Power 27.44 12.56 10.57 4.28 Hold 9 1.05 1.26
NTPC 14.50 9.15 8.12 9.02 Buy 17 0.82 2.18
Tata Power NULL 12.02 11.28 14.92 Hold 21 0.93 0.51
* 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
JANUARY-MARCH STOCK PERFORMANCE
— All data from LSEG Data
— $1 = 85.5350 rupees
(Reporting by Anuran Sadhu in Bengaluru)
