CESC Q3 FY26: Revenue slips 24% QoQ, PAT down 33%

Why CESC’s December-quarter trend matters

CESC Ltd (NSE: CESC) reported a weaker sequential performance in the December 2025 quarter, with declines across revenue, EBITDA and net profit compared with the September 2025 quarter. The company’s latest quarter is being tracked closely because the quarter-on-quarter contraction was steeper than the year-on-year movement implied by other data points in the same extract. The dataset also flags CESC’s market capitalisation at about ₹20,268 crore, which keeps the stock on the radar for both utility-sector investors and income-focused shareholders. While utilities are typically considered steadier businesses, the December-quarter numbers show that earnings can still swing meaningfully across quarters.

Revenue fell sharply from September to December 2025

As per the provided quarterly comparison, CESC’s revenue in Dec ’25 was ₹4,262 crore versus ₹5,423 crore in Sep ’25. That is a sequential decline of 21.41%. The same section reports EBITDA of ₹1,036 crore in Dec ’25 compared with ₹1,217 crore in Sep ’25, implying a 14.87% drop. Net profit for Dec ’25 is stated at ₹304 crore versus ₹448 crore in Sep ’25, a 32.14% fall. These sequential changes indicate that the pressure was not limited to one line item, with profitability falling faster than revenue.

Q3 FY26 snapshot: YoY growth, but QoQ contraction

Another part of the extract frames the December quarter as Q3 FY26 and presents a “two narratives” view. On a year-on-year basis, net sales are shown rising 12.47% to ₹4,005 crore in Q3 FY26 from ₹3,561 crore in Q3 FY25. Consolidated net profit is shown improving 7.55% to ₹285 crore in Q3 FY26 from ₹265 crore in Q3 FY25. But sequentially, the same section highlights revenue declining 23.96% from Q2 FY26’s ₹5,267 crore and profit falling 33.41% from ₹428 crore.

Margin movement: operating margin down QoQ

The extract reports operating profit before depreciation, interest and tax (excluding other income) at ₹779 crore in Q3 FY26. This is linked to an operating margin of 19.45%, down 69 basis points from 20.14% in Q2 FY26, but up 232 basis points year-on-year from 17.13%. PAT margin is stated at 7.59% in Q3 FY26, down from 8.51% in the previous quarter and down 33 basis points year-on-year. The same section attributes part of the squeeze to relatively stable interest costs of ₹343 crore and depreciation of ₹308 crore against lower operating profitability.

Key concerns highlighted in the dataset

The extract explicitly flags “deteriorating profitability” because Q3 FY26 net profit fell 33.41% QoQ to ₹285 crore despite year-on-year revenue growth. It also highlights capital-return metrics: an average ROE of 12.23% and ROCE of 7.02%, described as trailing best-in-class peers. Separately, it lists watchpoints such as continued profit decline in Q4 FY26, operating margins falling below 15%, and debt-to-EBITDA rising above 6.0x as potential markers of higher financial risk. These are presented as risk indicators rather than confirmed outcomes.

What the quarterly numbers show at a glance

Note: The extract also separately states Dec ’25 net profit at ₹304 crore and revenue at ₹4,262 crore in a Sep ’25 vs Dec ’25 comparison. Both sets are reproduced as provided.

FY25 performance: growth in revenue, flat-to-down profit

For the quarter ended March 31, 2025 (Q4 FY25), the extract reports consolidated revenue (total income) of ₹4,030 crore and PAT of ₹385 crore. It also states that for FY25, revenue increased 11.8% year-on-year to ₹17,375 crore, while FY25 PAT was ₹1,428 crore, down 1.2% year-on-year from ₹1,447 crore. FY25 EBITDA is listed at ₹4,311 crore, with EBITDA margin described as stable around ~23-25%.

The Q4 FY25 detail in the extract breaks out revenue from operations at ₹3,877 crore (up 14.5% year-on-year from ₹3,387 crore) and total expenses at ₹3,704 crore (up 2.5% year-on-year from ₹3,613 crore). Other income is stated at ₹153 crore, described as more than doubling year-on-year, and profit before tax (PBT) is reported at ₹466 crore versus ₹419 crore.

A data inconsistency to note on Q4 FY25 EBITDA

One section of the extract states that CESC’s EBITDA for Q4 FY25 surged to ₹8,120 crore from ₹4,100 crore in Q4 FY24, alongside an EBITDA margin of 20.94% versus 12.11%. Elsewhere in the same extract, a table lists Q4 FY25 EBITDA at ₹1,105 crore and includes an “EBITDA (₹ Cr) 1,105 vs 1,055 (+4.7%)” line. Since both appear in the provided text, the figures are presented here without reconciliation.

Dividend and shareholder reference points

CESC Ltd. is stated to have declared a dividend of ₹6.00 on October 27, 2025. The extract also mentions an interim dividend of ₹4.50 per share (450%) in the context of Q3 FY25 results. These dividend declarations are part of the broader shareholder-return picture, alongside the margin and profitability trends discussed above.

Forecast ratio trends included in the extract

The provided “Forecast Financial Ratios” table for fiscal periods ending March lists EBITDA margin declining from 31.02% (FY2021) to 22.42% (FY2026), with FY2027 at 22.51% and FY2028 at 22.45%. It also shows EBIT margin at 23.57% (FY2021), 16.23% (FY2026), 16.23% (FY2027) and 15.78% (FY2028). The same table lists FCF margin at 4.23% (FY2025), 11.65% (FY2026), 19.33% (FY2027) and -6.06% (FY2028), and FCF/Net Income at 52.52% (FY2025), 144.8% (FY2026), 240.89% (FY2027) and -75.02% (FY2028).

Conclusion: the next quarter becomes a key check

Across the provided data, CESC’s December-quarter performance stands out for a pronounced sequential decline in revenue and profit, while year-on-year comparisons remain modestly positive in some snapshots. FY25 results show revenue growth but slightly lower full-year PAT, underscoring how profits can lag topline expansion in regulated and capital-intensive utility operations. The extract’s own watchpoints focus on whether sequential pressure continues, whether margins hold up, and whether leverage metrics remain contained in the coming quarters.