Dear All,
Forwarding you the Result Flash on CESC for 4QFY2011.
CESC – 4QFY2011 Result Flash Note
CESC reported a 13.6% yoy growth in its stand-alone top-line during 4QFY2011 to `875cr. The company’s top-line during the quarter was 10.7% below our estimates of `980cr. The below than expected growth in top-line, we believe may be on account of low PLF’s in the company’s plants. The company’s operating profit rose by 23% on yoy basis to `246cr, aided by a 214bp expansion in OPM’s to 28.1%. The expansion in operating margin was on account of 16.2% yoy decline in other expenses to `109cr. However, the power and fuel costs for company rose by 20.7% yoy to `426cr on account of higher coal costs. During the quarter, the company’s power purchase costs rose by 59% yoy to `140cr. On the bottom-line front, net profit rose by 12% on yoy to `112cr, although it was 18.2% below our estimates of 137cr. The company’s interest and depreciation costs rose by 23.4% and 28.8% yoy on account of new capacity addition. We maintain a Buy on the stock with a Target Price of `386.
Exhibit: 4QFY2011 Actual vs Estimates
| (` cr) | Actual | Estimates | Variation (%) |
| Net revenue | 875 | 980 | (10.7) |
| Operating Profit | 246 | 280 | (12.1) |
| OPM (%) | 28.1 | 28.6 | (46)bp |
| Net Profit | 112 | 137 | (18.2) |
Source: Company, Angel Research
Exhibit: 4QFY2011 performance
| Y/E March (` cr) | 4QFY2011 | 3QFY2011 | % Chg qoq | 4QFY2010 | % Chg yoy | FY2011 | FY2010 | % Chg |
| Net revenue | 875 | 939 | (6.8) | 770 | 13.6 | 4,015 | 3,365 | 19.3 |
| Power and Fuel costs | 426 | 451 | (5.5) | 353 | 20.7 | 2,091 | 1,714 | 22.0 |
| (% of Sales) | 49 | 48 | 46 | 52 | 51 | |||
| Staff Costs | 94 | 95 | (1.1) | 87 | 8.0 | 433 | 379 | 14.2 |
| (% of Sales) | 11 | 10 | 11 | 11 | 11 | |||
| Other Expenses | 109 | 140 | (22.1) | 130 | (16.2) | 418 | 450 | (7.1) |
| (% of Sales) | 12 | 15 | 17 | 10 | 13 | |||
| Total Expenditure | 629 | 686 | (8.3) | 570 | 10.4 | 2,942 | 2,543 | 15.7 
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