At a Glance

CESC Ltd, the RP-Sanjiv Goenka Group’s electricity arm, charged up Q1 FY26 with a ₹404 Cr net profit (+4% YoY) on revenue of ₹5,202 Cr (+7% YoY). OPM held at 17%, and EPS came in at ₹2.9. The stock is cruising at ₹177, trading at a modest P/E 17, with a juicy 2.55% dividend yield. It’s reliable, like that old ceiling fan—never flashy, but keeps running.

Introduction

Incorporated in 1978, CESC has been powering Kolkata and parts of Bengal for decades. Think of it as the silent workhorse in your portfolio—no sparks, no drama. Yet, with sales growth barely touching 7% in five years and other income contributing heavily, investors are asking: is CESC just a dividend play or a hidden multibagger?

Business Model (WTF Do They Even Do?)

• Power Generation – thermal and renewable mix.
• Distribution – monopoly in Kolkata, franchises in Rajasthan, Maharashtra.
• Group Leverage – synergy with RPSG’s retail and infrastructure arms.

The company earns regulated returns, meaning low risk, low thrills. Growth? Tied to electricity demand and tariff hikes.

Financials Overview

Q1 FY26 Snapshot:

• Revenue: ₹5,202 Cr (+7% YoY)
• Operating Profit: ₹864 Cr (OPM 17%)
• Net Profit: ₹404 Cr (+4% YoY)
• EPS: ₹2.9

Annual FY25 revenue was ₹17,001 Cr, with PAT ₹1,444 Cr. Growth? Stable but unspectacular.

Valuation

1. P/E Method

• EPS FY25: ₹10.3
• Industry P/E: 20
• Fair Value = 10.3 × 20 = ₹206

2. EV/EBITDA

• EBITDA FY25: ₹2,689 Cr
• Multiple: 7×
• EV ≈ ₹18,800 Cr → per share ≈ ₹190

3. DCF (low growth 6%, discount 10%)

• Range: ₹170 – ₹200

Current ₹177 → fairly valued, safe dividend play.

What’s Cooking – News, Triggers, Drama

• Dividend hero – consistent 44% payout.
• Capex minimal, no big growth drivers announced.
• Other income ₹1,189 Cr props profits – not sustainable.
• Regulatory dependence – tariff decisions critical.

Balance Sheet

Commentary: Leverage manageable, but high debt limits aggression.

Cash Flow – Sab Number Game Hai

Commentary: Operating cash flows steady; big investments FY25 dented free cash.

Ratios – Sexy or Stressy?

Commentary: Solid but not sizzling.

P&L Breakdown – Show Me the Money

Commentary: Revenue creeps up, profits stagnate.

Peer Comparison

Commentary: Cheapest of the lot, but growth is also the slowest.

Miscellaneous – Shareholding, Promoters

• Promoters: 52.1% (stable)
• FIIs: 10.9% (falling)
• DIIs: 25.4% (rising)
• Public: 11.6%

Institutions seem to like the steady dividend flow.

EduInvesting Verdict™

CESC Q1 FY26 delivered exactly what you’d expect – steady profits, good dividends, zero excitement. At P/E 17, the stock is neither cheap nor expensive. It’s the kind of scrip that pays your electricity bill but won’t light up your portfolio.

Past Performance

• Consistent profit maker, but growth flat.
• Dividend is the only consistent attraction.

Headwinds

• Regulatory control.
• Low growth, high debt.
• Heavy dependence on other income.

SWOT

Strengths: Monopoly distribution, strong parent group, steady cash flows.
Weaknesses: Slow growth, debt-heavy.
Opportunities: Renewable energy push, urban expansion.
Threats: Regulatory tariffs, competition in franchise zones.

Final Word

CESC is that old inverter in your home – dependable, hums along, but doesn’t excite. Investors wanting thrills should look elsewhere; income-seekers can stay plugged in.

Written by EduInvesting Team | 30 July 2025
SEO Tags: CESC, Power Distribution, Q1 FY26 Results, Dividend Stock