CESC To Spend Rs 20000 Cr In 5 New Plants (11-Mar-2010)
CESC Ltd. is eyeing to invest Rs. 20,000 crore in 5 new plants in order to establish 5,000 Mw of thermal generation capacity over the next few years.
The company has already commenced work at the projects in Haldia and Chandrapur in Maharashtra, while the other 3 are in the pipeline.
Mr. Sanjeev Goenka, Vice-Chairman of CESC said the group is looking at opportunities for inorganic growth too. On the back of its internal accruals, and room to tap both equity and debt options, funds would be not a problem for the company.
By 2013, the company is eyeing to commence at least 2 of these 3 Greenfield projects in eastern India. It is also planning to setup 1 thermal generation unit each in Bihar, Jharkhand and Orissa.
Initially, the company had earmarked Pirpainti, near Bhagalpur (Bihar) for its unit in that state, but after running into land acquisition problems, the company has decided to move the project closer to Patna. But the company is yet to find out the actual location.
A spokesperson said since the company is looking at the Patna distribution circle, it makes sense to move the project closer to the city. The plant will be somewhere in northern Bihar.
Even in Orissa and Jharkhand, the company is yet to decide on the locations of its units. However, since CESC has been allotted captives mines in the Dumka district of Jharkhand, it would be looking at sites in its proximity.
CESC is facing continued difficulty in the implementing its 1,200 Mw of thermal generation unit at Haldia. Although it has already started certain civil works, it is yet to gain control of a crucial piece of land at the centre of the property which has affected the overall progress of the project. It will take about 33 months for the project to be completed, once the acquisition of land is over.
CESC Ltd is currently trading at Rs.402, up by 0.70%.
The stock hit an intraday high of Rs.404.35 till now, as against the 52-week high of Rs.452.The stock hit a low of Rs.399 during the day. The stock had hit a 52-week low of Rs.180 on March 12, 2009.
The stock opens at Rs.399 at BSE. The total traded volume of the scrip on BSE till now stood at 1546.
Meanwhile today, the BSE Sensex is trading up by 62.53 points, or 0.36% , at 17230.49 on 10:02 AM.
The NSE Nifty is trading up by 17.15 points, or 0.33% , at 5150.55.
CESC has an equity capital of Rs 124.94 crore as of 2009 Dec. The face value per share is Rs 10. At the current price of Rs 402, the P/E multiple stood at 12.2148694803611 with book Value of 233.87 and P/BV at 1.72.
The total shareholding pattern of the company as on Dec 2009 stood at Promoters- 52.49%, Institutional Investors- 36.54%, General Public- 5.46% and other investors- 5.52%.
Considering the current price of Rs. 402 at 10:02:00 AM , the stock had underperformed the market over the past one month till 12/03/2010 surged 2.3% as compared to the Sensex''s return of 8.22% and NSE Nifty''s 8.22 % returns.
Considering the current price of Rs. 402 at 10:02:00 AM , the stock had outperformed the market over the past one quarter till 12/03/2010 surged 2.06% as compared to the Sensex''s return of 0.78% and NSE Nifty''s 0.78 % returns.
CESC is also undertaking a 1,200 Mw project in Chandrapur, through its subsidiary Dhariwal Infrastructure. CESC is understood to be at a very advanced stage of negotiations for awarding the EPC (Engineering, Procurement, Construction) package, including the power generation equipment. This project is expected to be completed in another 34 months.
Earlier in January 2010, CESC had said that it would diversify its power generation fundamentals with a focus on developing its hydel energy generation. The company had said that up to Rs. 15,000 could be invested over the next 6 years to generate about 2,500 Mw of hydel power.
CESC Ltd has posted a net profit after tax of Rs 1020 million for the quarter ended December 31, 2009 as compared to Rs 980 million for the quarter ended December 31, 2008. Total Income has increased from Rs 7910 million for the quarter ended December 31, 2008 to Rs 8230 million for the quarter ended December 31, 2009.
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