CESC stock climbs 5% on plans to acquire electricity distribution co

Power utility firm CESC shares surged up to 5.17 per cent at Rs 182 a on the BSE in Monday’s intraday deals. This came after CESC on Friday announced that Eminent Electricity Distribution, a fully-owned subsidiary of CESC, has received a Letter of Intent (LOI) to acquire a 100 per cent stake in an electricity distribution company in Chandigarh. 

 

Valued at Rs 871 crore, the deal is expected to be completed within the next 30 days, marking a strategic expansion for CESC in electricity distribution and retail supply.

 

CESC Limited, a flagship company of the RP-Sanjiv Goenka Group, is involved in the generation and distribution of electricity across 567 square kilometres in Kolkata, Howrah, Hooghly, and North and South 24 Parganas. The company currently operates three generating stations at Budge Budge, Southern, and Titagarh, with a total capacity of 1,125 MW.

 

Q2 results

Power company CESC Ltd reported a 1.4 per cent year-on-year (YoY) increase in net profit, reaching Rs 353 crore for the second quarter ending September 30, 2024, compared to Rs 348 crore in the same quarter of the previous year. Revenue from operations rose 8 per cent to Rs 4,700 crore, up from Rs 4,352 crore in Q2 FY24.

 

At the operating level, Ebitda surged 38.7 per cent to Rs 896 crore, compared to Rs 646 crore in the year-ago period, with the Ebitda margin increasing to 19 per cent from 14.8 per cent. Energy costs rose 55.2 per cent YoY to Rs 2,543 crore, driven by higher fuel and power purchase prices. However, regulatory income more than doubled, growing 2.6x to Rs 689 crore, supporting overall profitability.

CESC share price history

The company’s stock has outperformed the market year to date as it has risen 30 per cent, while gaining 82 per cent in the last one year. In comparison BSE Sensex has risen 11 per cent year to date and 21 per cent in a year. 

 

The company has a total market capitalisation of Rs 23,727.71 crore. CESC shares are trading at a price to earnings multiple of 30.24 times and at an earning per share of Rs 5.92. 

 

At 9:36 AM; the shares of the company were trading 3.44 per cent higher at Rs 179 a piece. By comparison, the BSE Sensex was up 1.48 per cent at 80,284.39 level.