Noida PPA setback will affect CESC’s earnings estimates
The Uttar Pradesh Electricity Regulatory Commission’s decision to not approve the 200 megawatts (MW) power-purchase agreement (PPA) between the Noida Power Co. Ltd and Dhariwal Infrastructure Ltd once again raises a question mark over CESC Ltd’s earnings. Dhariwal Infrastructure is a unit of CESC. It houses the 600MW thermal power project at Chandrapur in Maharashtra. The plant has long-term PPAs for only half of its capacity and around 300MW lacks long-term purchase agreements. This under-utilization is resulting in losses, which are ultimately borne by the parent company.According to ICICI Securities Ltd, the Chandrapur project is incurring a quarterly cash loss of Rs90 crore. Last fiscal year (FY17) the unit posted a loss of Rs484 crore......