28 December 2018 CESCs power distribution includes Kolkata, Noida (49% stake) and three franchisee (DFs) circles in Rajasthan. The generation portfolio includes installed capacity of ~2.5GW, of which only 300MW is without any long-term PPA. The regulated distribution business of Kolkata and Noida generates a healthy RoE of ~20%. Noida, which is a new circle, has grown at CAGR of ~21% over FY13-18 and we expect ~11% CAGR over FY18-21. The DFs are in the initial years of operation. We expect a meaningful contribution from DFs only after a couple of years. Generation capacity under long-term PPA generates healthy double-digit RoE on the back of efficient operations and favorable norms. CESC, in its new form, reported PAT of ~INR8.3b in FY18, up ~55% YoY, driven by the full benefit of Noida PPA at Dhariwal power plant. PAT is partly dragged by initial losses in the DFs (~INR1.