CESC H1FY27 Results (NSE: CESC)
Signal: Steady quarter
The read
The trajectory is a moderation after the recent margin expansion: H1FY27 revenue grew 5.4% YoY, but operating margin fell 90bps to 16.0% after three successive quarters of YoY margin expansion in the prior-results series; lower finance costs contained the impact, keeping PAT growth at 5.1%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹5,837 Cr | +5.4% | N/A |
| Net profit | ₹476 Cr | +5.1% | |
| EPS | ₹3.59 | +5.3% | |
| EBIT margin | 16.0% |
P&L walk
Standalone revenue increased 5.4% YoY to ₹5837 crore, but gross margin and operating margin each contracted 90bps as fuel costs rose 12.4% and energy-purchase costs rose 5.2%; PAT still increased 5.1% to ₹476 crore, helped by lower finance costs and tax.
Key positives
- Revenue from operations increased 5.4% YoY to ₹5837 crore, with the filing linking revenue recognition to regulatory orders and the fuel and power purchase adjustment surcharge.
- Finance costs declined 12.1% YoY to ₹392 crore, helping PAT rise 5.1% YoY to ₹476 crore despite a 65.3% decline in net regulatory income to ₹51 crore.
- EPS increased 5.3% YoY to ₹3.59, broadly tracking PAT growth and passing the PAT-to-EPS dilution check.
Key concerns
- Operating margin contracted 90bps YoY to 16.0% as fuel cost rose 12.4% to ₹914 crore, faster than revenue growth of 5.4%.
- Operating cash flow fell 38.2% YoY to ₹1081 crore while trade receivables increased to ₹1912 crore from ₹1401 crore.
- Regulatory income declined to ₹51 crore from ₹147 crore, increasing the importance of underlying operating performance and future tariff recoveries.
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