CESC to invest Rs 3000 crore in 500 MW renewable energy

Has reported a near-flat net profit of Rs 152 crore in the quarter ended June

R P Sanjiv Goenka group flagship power company CESC today said it would invest about Rs 3000 crore for 500 MW solar and wind power in the next 18 months.

“As a part of next level of expansion, we will be doing 500 Mw solar and wind power in the next 18 moths. There will be investment about Rs 3000 crore,” CESC chairman (who is also the group chairman), Sanjiv Goenka said.

“The projects will be in states like Tamil Nadu, Gujarat, Rajasthan, Madhya Pradesh. In the next six months projects would start coming up,” he added.

CESC's total thermal and renewable generation capacity currently stands at 2,524 MW, of which 75 MW is in solar and wind power. The company currently has 50 MW wind power capacities in Rajasthan and Gujarat and 25 mw solar capacities in Gujarat and Tamil Nadu.

The company today reported a near-flat net profit of Rs 152 crore in the quarter ended June, 2015 compared to corresponding period of the previous fiscal, impacted by lower sales but higher mergin.

Net sales for the period stood at Rs 1689 crore, down 8.6 per cent from the corresponding period of 2014-15.Operating profit (earnings before interest, tax, depreciation and amortisation) was up 2 per cent year-on-year at Rs  386 crore, and margin expanded by 240 basis points to 22.7 per cent on the back of lower fuel cost and employee expenses.

Spencer's demerger:

Meanwhile, the demerger of Spencer's retail from RP-Sanjiv Goenka Group's flagship company CESC may happen soon as it made first-ever operating profit in the month of May, 2015. Currently, Spencer's Retail is a wholly owned subsidiary of CESC.

Earlier the company had indicated that the demerger plan hinges upon break-even of the retail chain. Responding to query on this, Goenka said, “Yes. We think we are very close to that with Spencer's achieving break-even in May. Hopefully soon it will be sustainable and we will go ahead with the plans.”

Goenka maintained that the company is looking at various options for listing. There may be initial public offering(IPO) or a mirror-image demerger from CESC where the demerged entity will be automatically listed.