CESCs 2QFY17 result was ahead of our estimates led by continued growth in power demand (3.4% for 2QFY17 and 6.0% for 1HFY17) and contribution from merchant sales (7mn units in 2QFY17). PAT at Rs 2.4bn was flat as the increase in tariff was negated by the recent WBERC order disallowing recovery of negative bid on its captive mine.