CESC

Shifts to Renewables for Growth, Aims to Double Profits by FY30

plans to double its profits by FY30 through significant new investments focused on renewable energy and the electricity distribution business. → This strategic shift follows a period of stagnation, as the company’s profits grew by less than 2% per annum on average between FY20 and FY25. → The company's immediate plan involves adding 3,200 MW of renewable energy projects in the first phase, with a long-term goal of reaching a total renewable power generation capacity of 10,000 MW by FY32. → Simultaneously, CESC intends to develop 3,000 MW of solar cell and module manufacturing capacity and commit ₹3,000 crore to expand its electricity distribution business. → CESC is focused on developing hybrid and firm and dispatchable renewable energy projects, which combine solar and wind power, though wind projects are prone to execution delays due to remote sites and transmission connectivity challenges. → Achievement of the green energy targets, particularly beyond the 1,200 MW of renewable projects currently under construction, is dependent on timely land acquisition and grid connectivity. → The company is confident of securing a new power supply contract for its Chandrapur thermal power plant at a favorable tariff, which is expected to support cash flows and aid earnings growth. → Growth in the distribution sector hinges on the privatization of state electricity distribution firms, with CESC planning to bid for discoms in Uttar Pradesh. → Analysts view the plan favorably, citing the higher-tariff Power Purchase Agreement (PPA) for Chandrapur, renewable capacity addition, and potential new distribution licenses as key benefits. → However, the success of the strategy remains contingent on strong execution, securing timely regulatory approvals and infrastructure connectivity, and navigating market conditions, such as the global supply-demand dynamics affecting solar module prices.