CESC arm Eminent to acquire 100% stake in Chandigarh power distributor for ₹871 crore
Power utility firm CESC Ltd on Friday (November 22) said its wholly-owned subsidiary, Eminent Electricity Distribution Ltd, has received a letter of intent (LOI) for the acquisition of 100% shares in a distribution company responsible for the electricity distribution and retail supply in the union territory of Chandigarh.
“…we write to inform you that Eminent Electricity Distribution Ltd, a wholly owned subsidiary of CESC Ltd has received today a “Letter of Intent” for acquiring 100% shares in a distribution company responsible for distribution and retail supply of electricity and having distribution license in the Union Territory of Chandigarh,” as per to a stock exchange filing.
The deal, valued at ₹871 crore, is subject to the terms and conditions outlined in the LOI. The acquisition is expected to be executed within 30 days.
CESC reported a 1.4% year-on-year (YoY) increase in net profit at ₹353 crore for the second quarter that ended September 30, 2024. In the corresponding quarter of the previous fiscal, CESC posted a net profit of ₹348 crore.
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Revenue from operations grew 8% to ₹4,700 crore against ₹4,352 crore in the same quarter in FY24. At the operating level, EBITDA surged 38.7% to ₹896 crore in the second quarter of this fiscal over ₹646 crore in the year-ago period.
The EBITDA margin stood at 19% in the reporting quarter versus 14.8% year-on-year. EBITDA is earnings before interest, tax, depreciation, and amortisation. CESC’s bottom line was supported by a significant rise in regulatory income.
The company’s EBITDA faced pressure from elevated energy costs, while multiple one-off expenses also impacted its operational margins. Energy costs surged by 55.2% YoY to ₹2,543 crore, reflecting higher prices in fuel and power purchases. However, regulatory income grew 2.6x to ₹689 crore, aiding overall profitability.
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Shares of CESC Ltd ended at ₹173.05, up by ₹2.05, or 1.20%, on the BSE.
(Edited by : Shoma Bhattacharjee)
