CESC shares dip 4% after mixed Q2 earnings, Kotak sticks to 'Sell'

CESC Ltd

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26 Aug, 2025 12:21

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Shares of CESC dropped nearly 4 percent following its mixed Q2FY25 earnings. The company reported a modest 1 percent increase in consolidated net profit to Rs 353 crore, driven by strong results from power subsidiaries Haldia and Chandrapur. However, standalone profit fell by 5 percent to Rs 220 crore due to higher interest costs.

At 1:44 PM, CESC shares traded 3.8 percent higher at Rs 176, with a 30 percent year-to-date gain, significantly outperforming the Nifty 50’s 9 percent increase.

For the quarter, CESC's revenue rose 8 percent year-on-year to Rs 4,700 crore. CESC's EBITDA rose by 1.5 percent year-on-year to Rs 1,085 crore in Q2FY25.

Sequentially, net profit slipped 6.6 percent and revenue declined 3.4 percent.

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Kotak Institutional Equities maintained a 'Sell' rating and revised target its target price on the stock to Rs 145 from Rs 140. "We would like to see some tangible improvement in the earnings profile through greater contribution from the distribution franchisee and/or improved visibility on the new green initiatives before turning constructive," the brokerage said.

The company plans 3.2 GW of new renewable energy capacity, including wind and solar, but these projects are still in the development phase. The company has signed agreements with Inox Wind and Suzlon Energy for wind turbines, and land acquisition for solar capacity is underway. The initial 1.4 GW is expected to be operational by FY27, with the remaining capacity slated for FY28.

However, according to Kotak, "These new renewable capacities are still in the early stages, with construction yet to begin on the projects."

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