CESC Shares Move Up As Solar Energy Acquisition Highlights Renewable Energy Portfolio

Shares of CESC Ltd (NSE: CESC), the flagship entity of RP-Sanjiv Goenka Group, saw a 4.54% upswing following an announcement of its foray into a significant acquisition in the renewable energy sector.

The electricity generation and distribution giant is in the process of acquiring a 100 percent stake in Deshraj Solar Energy Pvt. Ltd. The strategic move is facilitated through its subsidiary Purvah Green Power Pvt. Ltd., showcasing the company's bolstered commitment to greener energy solutions.

CESC's share price has now gained 43.22% on the year so far, significantly outperforming the market.

The latest acquisition by CESC Ltd. aligns with its broader strategy to expand its renewable energy portfolio. The company has a history of similar acquisitions, including Bhojraj Renewables Energy Pvt. Ltd. and Bhadla Three SKP Green Ventures Pvt. Ltd., indicating a sustained push into the renewable energy arena. This move is particularly pertinent as the company sets its sight on achieving a 3 GW hybrid renewable energy capacity within the next 4 to 5 years.

In tandem with its expansion plans, CESC Ltd. has reported a robust financial performance in the first quarter of FY25. The net profit witnessed an uptick of 5.43 percent to Rs. 388 crores compared to the corresponding period from the previous year. Moreover, a revenue surge of 12.83 percent further underscores the company's strong financial foothold amidst its aggressive growth strategies.

CESC Ltd. already boasts considerable operational capacity with two distribution licenses in Kolkata and UP. In addition to these, the company holds four distribution franchises across Rajasthan and Maharashtra. Its power generation prowess is also considerable, with a capacity of 2,140 MW reported as of Q1 FY25.

This financial vigour is mirrored in the company's share performance. Investors have witnessed a substantial return of 35.54 percent over the span of the past six months. The annual snapshot of returns is even more impressive, at 113.80 percent, delineating the company's thriving market presence and investor confidence.

Serving an extensive consumer base, CESC Ltd. caters to 44 lakh consumers across six locations in India, including a mix of domestic, industrial, and commercial users. The firm's persistent efforts to diversify and invest in renewable energy sources reflect not only its response to the growing demand for clean energy but also stand as a testament to its strategic vision in the dynamic energy sector. The acquisition of Deshraj Solar Energy Pvt. Ltd. is poised to further consolidate CESC Ltd.'s position as a leading and responsible player committed to sustainable practices.