Home >Companies >Company-results >CESC posts `256 crore net profit in March quarter

Kolkata: CESC Ltd, the RP-Sanjiv Goenka group’s electricity generation and distribution firm, posted a stand-alone net profit of 256 crore for the quarter ended March, nearly unchanged from the same period last year.

Profit was flat because demand from customers was low and the company raised power tariffs in the same quarter last year, said Sanjiv Goenka, the new chairman of CESC. Sales in the fourth quarter increased 8.7% to 1,513 crore.

However, net profit exceeded expectations by at least 70 crore, said Rajesh Agarwal, head of research at Kolkata-based broking firm Eastern Financiers Ltd.

“CESC surpassed expectations of the Street, led by a steady tariff growth and higher sales," he said. The additional generation capacity from its two upcoming plants at Haldia and Chandrapur will substantially add to revenue and market capitalization when they get commissioned, he said.

Peak daily demand was 1,904 megawatts (MW) in the financial year 2012-13, Goenka said.

Though the company will continue to pass on coal prices increases by Coal India Ltd (CIL) to customers, CIL’s pricing policies needed to be “regulated", Goenka said.

Coal India told the stock exchanges on Monday that it will “rationalize" the price of coal, which will result in an additional revenue of 2,511.58 crore to the miner every year.

CESC will take a call on raising tariffs after reviewing the impact of the coal price rise on its cost, Goenka said.

In the January-March quarter, CESC’s fuel costs increased 5% over the year-ago period to 437 crore. Construction at CESC’s units, mentioned above, was progressing as per schedule, Goenka said.

The first phase of the proposed unit at Haldia in West Bengal would be commissioned in July this year and the plant at Chandrapur in Maharashtra would start generating power from September 2014, he said.

The two units, which together entail a 7,800 crore investment, will add 600MW of capacity to CESC’s current 1,225MW capacity by March 2015. The company commissioned a 40MW wind power plant at Jaisalmer in Rajasthan last month and a 9MW solar power unit in Gujarat a year ago.

It’s planning to set up two new solar power units in Gujarat and Rajasthan, Goenka said.

Meanwhile, Spencer’s Retail Ltd, a 100% subsidiary of CESC, pared its loss in 2012-13 to 80 crore, down from 220 crore last year as sales at the chain of retail stores picked up, Goenka said.

Spencer’s sales increased to 1,226 per sq. ft during the year from 1,050 per sq. ft last year.

CESC’s plans of carving out Spencer’s into an independent company, which would then be listed in the stock exchanges, are on track, Goenka said.

Goenka, the chairman of the RP-Sanjiv Goenka Group, was appointed the chairman of CESC by its board on Tuesday, following the demise of his father R.P. Goenka last month.

In another management change, CESC announced that managing director Sumantra Banerjee will retire and be succeeded by Aniruddha Basu, currently the executive director of distribution and services.

CESC rose 2.25% to 336.40 on BSE on Tuesday, while the benchmark Sensex rose 0.65% to 20,160.82 points.

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