One of the green energy stocks engaged in the business of generation and distribution of Electricity has jumped by 2.28 percent after the acquisition of 100% shares in Chandigarh electricity distribution company for ₹871 crore.
Stock price movement:
In Monday trading session, CESC Limited‘s share jumped by 2.28 percent from the previous close of Rs. 173.05. The stock opened at Rs. 178.95 and is currently trading at Rs. 177, with a high of Rs. 182 and a low of Rs. 176.15. The market capitalization now stands at approximately Rs. 23,462.60 crore.
What Happened:
Eminent Electricity Distribution Limited, a wholly owned subsidiary of CESC Limited, has received a Letter of Intent (LOI) for the acquisition of 100% shares in a distribution company responsible for electricity distribution and retail supply in the Union Territory of Chandigarh.
The acquisition is to be completed within 30 days of the issuance of the LOI. The total consideration for the acquisition is Rs. 871 crore, subject to the terms and conditions outlined in the LOI.
Projects in Renewable Business:
CESC Limited is strategically expanding its wind energy portfolio through an agreement with Inox Wind for 1.5 GW of turbines, collaboration with Suzlon Energy for EPC services, and a partnership with Ecoren Energy India for a 686.85 MW project. The company is also set to acquire Bhojraj Renewables for a 300 MW wind project.
In the solar sector, CESC demonstrates equal ambition with multiple 300 MW projects underway. The company has acquired complete stakes in Bhadia 3 SKP Green Ventures and Deshraj Solar Energy, while also securing a PPA for a 300 MW solar PV project. Additionally, an EPC contract for another 300 MW solar project with Purvah Green is nearing completion.
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Manufacturing Capacity:
CESC Limited has a robust power generation capacity of 2,140 MW through its five thermal power plants. The Budge Budge facility leads power generation with 750 MW, while both Dhariwal Infrastructure and Haldia Energy contribute 600 MW each.
Southern Generating Station and Crescent Power add 135 MW and 40 MW, respectively. CESC primarily supplies power to Kolkata and NPCL regions to expand its merchant market presence, as Chandrapur’s 300 MW unit will start operations in March 2025, backed by strong fuel supply agreements.
CESC Limited is expanding its renewable capacity to 3,200 MW by March 2029. The company plans to develop 1,700 MW of wind and 1,500 MW of solar power.
Recent quarter results and ratios:
CESC Limited’s revenue has increased from Rs. 4,352 crore in Q2 FY24 to Rs. 4,700 crore in Q2 FY25, which has grown by 8 percent YOY. The net profit of CESC Limited has also grown by 2.75 percent, from Rs. 363 crore in Q2 FY24 to Rs. 373 crore in Q2 FY25.
CESC Limited’s revenue and net profit have grown at a CAGR of 7.48 percent and 3.85 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE should be 11.6 percent and 12.1 percent, respectively. The debt-to-equity ratio of the company is to be 1.29. CESC Limited’s EPS is to be Rs. 10.6.
Company Overview:
CESC Limited was formerly known as The Calcutta Electric Supply Corporation (India) Limited and is a leading integrated power utility company in India, primarily engaged in the generation, transmission, and distribution of electricity. Established in 1899, CESC is headquartered in Kolkata and operates under the RP-Sanjiv Goenka Group.
Written By – NIkhil Naik
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