India's CESC posts Q2 profit rise on higher power demand

Indian power generation and distribution company CESC posted a 14.1% rise in second-quarter profit on Wednesday, helped by high electricity demand.

Consolidated net profit for the three months ended Sept. 30 increased to 3.48 billion rupees ($41.80 million) from 3.05 billion rupees a year earlier, the RP - Sanjiv Goenka Group flagship company said in an exchange filing.

Revenue from operations rose 11.2% to 43.52 billion rupees.

For further results highlights, click

WHY IT MATTERS

The September quarter marked the West Bengal-based company's third straight quarter of reporting a rise in profit.

India's power demand, which typically peaks during May due to severe heat, remained high during the July-September quarter due to unusually dry weather, a plunge in hydroelectric output and higher economic activity.

According to brokerage Elara Capital, power demand in India soared to a record high of 241GW in September, surpassing the Central Electricity Authority's target of 230GW for FY24.

State-run peers Power Grid Corporation of India and NTPC posted a 3.6% and 38.2% rise in quarterly profit respectively, helped by higher sales and lower expenses. Tata Power Company is expected to report later in the day.

PEER COMPARISON

Valuation (next 12 Estimates (next 12 months) Analysts' sentiment

months)

RIC PE EV/EBITDA Revenue growth Profit Mean # of Stock to Div

growth rating* analysts price yield

target** (%)

CESC Ltd 7.44 6.69 7.70 11.48 Buy 7 0.87 7.80

Tata Power Company NULL 11.77 10.05 70.26 Hold 17 1.05 0.82

Ltd

NTPC Ltd 11.11 8.25 5.13 15.54 Strong 15 0.88 2.84

Buy

Power Grid 12.28 7.60 1.74 1.94 Buy 9 0.99 5.41

Corporation of India

Ltd

* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

JULY-SEPT STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 83.2455 rupees

(Reporting by Anuran Sadhu in Bengaluru; Editing by Sohini Goswami)