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The company reporterd over 36% jump in the net profit at Rs. 101 crore for the third quarter ended December 2012 on year-on-year basis. The RP Sanjiv Goenka Group-led electricity supply company had posted a net profit of Rs. 74 crore in the corresponding quarter in 2011.
Market expectation was that net profit should hover around Rs 106 crore.
A report y Edelweiss Research mainatained ‘HOLD’ rating after the quarterly results citing weakness in demand and pending tariff true up. While a steady performance by Spencers should reduce losses going ahead, pending clarity on FDI in retail and the recent Firstsource acquisition continue to be matter of concern.
Weak demand, delay in tariff revision dented CESC profit. Power sale of 1,961MUs (vis-à-vis 2BUs in Q3FY12) was flat YoY due to the extended winter which led to drop in PLFs to 81% from 86.5%. Further the petition for FY13 tariff revision which has been delayed is still awaiting an order from the West Bengal Electricity Regulatory Commission (WBERC) to recover the revised fixed costs (involve approval of capex servicing and O&M costs).
Going forward, the report said, “While tariff hike is expected in Q4, we remain concerned over the unrelated diversification through Firstsource acquisition and continued, albeit lower, loss funding in Spencers leading to diversion of cash flows from the stable regulated power business.”
