CESC - March 2013 Results Preview - Motilal Oswal

- We expect CESC to report PAT of INR2b as we factor tariff hike to be booked in the current quarter. Earlier, company was to account for a tariff hike (INR0.06/unit from April 2012) in 3Q but deferred it to 4Q due to delay in an order.

- For Jan-Feb 2012, CESC's 1,225MW generation projects operated at 59% PLF and generation stood at 1BU. The decline was due to lower demand arising from a prolonged winter season.

- CESC entered into an agreement with the Jharkhand Electricity State Board (JSEB) for Ranchi's distribution franchise for 15 years. This is the first distribution franchisee and we expect the company to do well due to the distribution business' experience in KLA.

- CESC completed First Source Ltd's (FSL) open offer, which saw tendering of ~7.4% stake by shareholders, which took the total stake in FSL to 56.8% and total investment commitment at INR4.5b. In 9MFY13, FSL's reported revenue, EBITDA and PAT stood at INR21b (up 29%), INR2b (up 49%) and INR1b (up 173%) respectively.

- We expect CESC to post standalone PAT (ex Spencer) of INR5.7b in FY13E (up 2.7% YoY) and INR6.5b in FY14E (up 14% YoY).

Source : Equity Bulls

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