CESC margin falls for a second quarter as costs outpace revenue
Standalone profit was nearly flat YoY, helped by a 45.45% rise in other income despite a higher tax rate.
Filed 06 May 2026, 17:16 IST · after market close · CESC Ltd (CESC)
Key takeaways
- Standalone net profit rose only +2.29% YoY to Rs 223 cr as expenses grew +5.46% against revenue growth of +1.07%.
- Operating margin fell 3.41 percentage points YoY to 18.06%, marking a second straight quarterly decline from 22.35% in Q2FY26.
- Other income contributed 95.30% of pre-tax profit, while the tax rate rose 8.51 percentage points YoY to 30.09%.
Price around the results
Revenue growth did not cover the cost increase
Standalone revenue rose only +1.07% YoY, while expenses increased +5.46%, pulling operating profit down -14.97% and narrowing operating margin by 3.41 percentage points. Sequentially, revenue grew +7.21%, but expenses grew faster at +10.30%, leading to a 2.30 percentage-point margin decline. This was the second consecutive quarterly fall in margin after the 22.35% recorded in Q2FY26.
Reported profit was supported by other income
Profit before tax increased +14.75% YoY even as operating profit declined, because other income rose +45.45% and interest expense fell -4.17%. Other income accounted for 95.30% of pre-tax profit, making reported earnings materially less dependent on operating profit. The higher tax rate, up 8.51 percentage points YoY, limited the benefit to net profit, which rose only +2.29%.
CESC remains below the Utilities peer margin
CESC's 18.06% operating margin was 17.13 percentage points below the 35.19% median for the 17 Utilities peers that had reported the same quarter. It ranked fourth from the bottom on this measure. The comparison places the quarter's margin pressure in a weaker position than the sector group, not just against CESC's own prior quarters.
The initial stock reaction was muted
The stock rose +0.86% on the first day after the results, while its median absolute move after the past eight results was 4.02%; the initial response was therefore smaller than usual for CESC. The move was -0.30% after five sessions and -1.58% after 15 sessions, before reaching -8.71% after 30 sessions. Its past results reactions have been mixed, with three rises and five declines.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,170 cr | ₹2,024 cr | +7.21% | +1.07% |
| Other income | ₹304 cr | ₹194 cr | +56.70% | +45.45% |
| Expenses | ₹1,778 cr | ₹1,612 cr | +10.30% | +5.46% |
| Operating profit | ₹392 cr | ₹412 cr | -4.85% | -14.97% |
| Operating margin (%) | 18.06% | 20.36% | — | — |
| Interest | ₹207 cr | ₹217 cr | -4.61% | -4.17% |
| Depreciation | ₹170 cr | ₹170 cr | +0.00% | -3.41% |
| Profit before tax | ₹319 cr | ₹219 cr | +45.66% | +14.75% |
| Tax | ₹96 cr | ₹43 cr | +123.26% | +60.00% |
| Net profit | ₹223 cr | ₹176 cr | +26.70% | +2.29% |
| EPS (₹) | ₹1.69 | ₹1.33 | +27.07% | +3.05% |
Operating margin of 18.06% compares with a Utilities sector median of 35.19% across 17 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.86% | +0.88% |
| Next session | -0.32% | — |
| 5 sessions | -0.30% | +2.34% |
| 15 sessions | -1.58% | — |
| 30 sessions | -8.71% | — |
Volume on the results session was 0.82× its 20-day average.
What to watch
- Whether standalone operating margin recovers from 18.06% after two consecutive quarterly declines.
- Whether other income's 95.30% contribution to pre-tax profit reduces in the next quarter.
- Whether expenses grow more slowly than revenue after the YoY gap of +5.46% versus +1.07%.