CESC Reports Flat Net In Q4FY13, Retail Losses Decline

Kolkata based CESC came out with its fourth quarter results on Tuesday, May 28, 2013. The company has reported a 9.7% growth in its revenues to Rs 1492 crore, while its net profits remained flat at Rs 256 crore. Its shares, however, surged by 2.25% to Rs 336 on the back of a sequential rise in the EBITDA margins and a decline in losses posted by its retail business.

For the quarter, the company’s fuel cost was at Rs 437 crore against Rs 416 crore a year before. As a percentage of sales, the fuel cost has declined by 200 basis points on a year-on-year basis and by 10% sequentially. Power purchases increased by 76% to Rs 206 crore during the quarter. As a percentage of the sales, this cost was at 14% against 9% a year ago, indicating a rise in this cost item. All the other costs, including those for depreciation and personnel, remained well within control. Following the moderation of fuel costs, the EBITDA margins have shown a remarkable improvement of 400 basis points on a sequential basis.

The tax rate for the quarter remained at 20%. Interest expenses rose by 31% to Rs 85 crore. At 4.76x, the interest cover ratio remains healthy and improved from the December 2013 quarter. The liquidity ratios, however, have shown some decline in the quarter. Its trade receivables have increased by 62% despite a mere 9.7% rise in sales.

Though the overall result is not very healthy, the decline in the losses of the retail business is a positive. The stock may do well in the year if the company fares well on this front in the next quarter too.