NSE₹₹₹Shares of Calcutta Electric Supply Corporation (CESC) Ltd. rallied up to 10% on Tuesday (July 9) after the company increased effective tariff by 5.7%, and started to levy fuel adjustment charge to its consumers.At 10:10 am, the scrip was trading 7.08% higher at184.25 apiece on the NSE.
The stock has risen nearly 35% so far this year and it's up 145% in the last one year.According to IIFL, the increase in tariff should effectively cover CESC's incremental fuel costs and ensure complete cost recovery.
Accumulated regulatory assets, currently at3,000 crore to3,500 crore, will be gradually recovered with regulatory approval.From the stock's perspective, this is a significant development, IIFL noted.The CESC stock trades at a steep discount compared to Torrent, Tata, and Adani Power, and this gap could narrow substantially.This year in April, CESC received an order of determination of tax, interest and penalty from the West Bengal government.
The company has been issued the penalty worth ₹14.95 crore for FY19.The company said that it will appeal in respect of the order issued by the West Bengal government.“Based on the merits of the matter, prevailing law and the advice of the counsel, the company will be filing an appeal in respect of the aforesaid order disputing the tax, interest and penalty raised therein and reasonably expects favourable orders from the appellant authorities,” it had said in a filing.CESC is into generation, transmission, and distribution of electrical power.
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Shares of Calcutta Electric Supply Corporation (CESC) Ltd. rallied up to 10% on Tuesday (July 9) after the company increased effective tariff by 5.7%, and started to levy fuel adjustment charge to its consumers.At 10:10 am, the scrip was trading 7.08% higher at184.25 apiece on the NSE. The stock has risen nearly 35% so far this year and it's up 145% in the last one year.According to IIFL, the increase in tariff should effectively cover CESC's incremental fuel costs and ensure complete cost recovery. Accumulated regulatory assets, currently at3,000 crore to3,500 crore, will be gradually recovered with regulatory approval.From the stock's perspective, this is a significant development, IIFL noted.The CESC stock trades at a steep discount compared to Torrent, Tata, and Adani Power, and this gap could narrow substantially.This year in April, CESC received an order of determination of tax, interest and penalty from the West Bengal government. The company has been issued the penalty worth ₹14.95 crore for FY19.The company said that it will appeal in respect of the order issued by the West Bengal government.“Based on the merits of the matter, prevailing law and the advice of the counsel, the company will be filing an appeal in respect of the aforesaid order disputing the tax, interest and penalty raised therein and reasonably expects favourable orders from the appellant authorities,” it had said in a filing.CESC is into generation, transmission, and distribution of electrical power.
