Power Stock in Focus After Securing 600 MW Wind-Solar Hybrid PPAs Across Multiple Projects

Synopsis: The power generation company has entered into multiple long-term hybrid energy agreements, strengthening its renewable sourcing strategy through diversified partnerships and internal capacity, supporting stable and cleaner power procurement. 

The share of this small cap company majorly engaged in the business of generation and distribution of Electricity were in focus after securing 600 MW Wind-Solar Hybrid Power projects from multiple companies 

With the market capitalization of Rs. 22,608 Crores, the shares of CESC Ltd reached an intraday high of Rs. 175.50 per share, rising nearly 3 percent from its previous day closing of Rs. 170.48 per share and is trading at a P/E of 15.3 where as industry P/E stands at 28.4 

About the Agreements

CESC Limited has signed the Power Purchase Agreements for procurement of Power from grid-connected wind solar hybrid power projects with the following companies, as detailed below 

The company has signed a Power Purchase Agreement for procurement of 100 MW wind-solar hybrid power from Vismaya Renewables India Project Private Limited. The agreement is structured as a long-term arrangement with a tenure of 25 years, ensuring steady supply visibility. The tariff for this project stands at Rs.  3.74 per kWh, making it a competitively priced renewable sourcing deal. 

Another agreement has been executed with Hexa Climate Solutions Private Limited for 100 MW of hybrid power. This project also follows a long-term 25-year PPA structure, ensuring consistency in supply. The applicable tariff is Rs.  3.75 per kWh, aligned with market-based competitive bidding, supporting cost-effective renewable procurement.

The largest portion of the capacity, 300 MW, has been secured through Purvah Green Power Private Limited, a subsidiary of the company. This is a related party transaction but executed through tariff-based competitive bidding at arm’s length in the ordinary course of business. The PPA tenure is 25 years, with a tariff of Rs.  3.75 per kWh. This reflects both internal capacity expansion and strategic control over a significant share of renewable sourcing. 

The company has also entered into a 100 MW PPA with Sprng Energy Private Limited. Similar to other agreements, this project carries a 25-year duration, ensuring long-term power availability. The tariff is fixed at Rs.  3.75 per kWh, maintaining consistency across most of the contracted renewable portfolio. 

About the company and Financials

CESC Limited powers millions of homes and businesses across India, serving over 4.8 million consumers with a peak demand exceeding 4.4 GW and annual sales of around 19,000 MU across seven locations. Its thermal portfolio includes five plants with a total capacity of 2,140 MW, of which 78 percent  is linked to its own distribution network.

On the renewable front, the company is targeting 3.2 GW capacity by FY29 and scaling up to 10 GW by FY32, aiming for a 60 percent + clean energy mix by 2030. Additionally, it is building a solar manufacturing ecosystem with plans to establish 3 GW of solar cell and module capacity by 2027.

Revenue from operations has decreased on a quarterly basis from Rs. 5267 Crores to Rs. 4,005 Crores, down 24 percent. Operating profit has decreased from Rs. 1061 Crores to Rs. 779 Crores, down 26.5 percent and net profit has decreased from Rs. 448 Crores to Rs. 304 Crores, down 32 percent. 

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