Reliance Power beats forecasts as it adds capacity

Mon Nov 5, 2012 3:15pm IST

People walk pass a billboard advertising Reliance Power, at the Bombay Stock Exchange (BSE) in Mumbai February 11, 2008. REUTERS/Punit Paranjpe/Files

People walk pass a billboard advertising Reliance Power, at the Bombay Stock Exchange (BSE) in Mumbai February 11, 2008.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

Stocks

   

REUTERS - Reliance Power reported a 2.1 percent rise in quarterly net profit, beating expectations thanks to higher generation capacity and said new power units would start production in the next few weeks to add yet more capacity despite a scarcity of fuel at other plants.

India's power companies are struggling to source fuel as domestic coal production stagnates and gas production remains below expectations. The fuel shortage has forced other power plants to run below capacity because fuel supply is tied to specific plants.

Earlier this year, India suffered one of the world's worst power blackouts, affecting about half of the country's 1.2 billion population.

Reliance Power, controlled by billionaire Anil Ambani, reported a net profit on Monday of 2.4 billion rupees for the second quarter ended September 30, compared with 2.35 billion rupees a year ago. Net sales more than doubled to 10.79 billion rupees, it said.

Analysts on average had expected a net profit of 2.1 billion rupees according to ThomsonReuters I/B/E/S.

The company said its fuel costs more than doubled to 6.37 billion rupees and finance expenses jumped 82.7 percent to 1.37 billion rupees.

Reliance Power generated 1,655 million kilowatt-hours, up 65 percent from the previous year in the quarter from its Rosa plant in Uttar Pradesh, the company said.

The first unit at its 3,960 megawatt (MW) Sasan power project and the second unit at Butibori project should be commissioned in the next few weeks, the company said.

Two of Reliance Power's projects totalling 6,400 MW have been stalled due to scarcity of cheap fuel and it faces the risk of losing one of those due to a legal wrangle with four state governments.

The company also ran into trouble in August when the country's federal auditor said it unduly benefited from a government decision allowing the power producer to use surplus coal from its captive block for another project it was not meant for.

Shares of the company, valued by the market at about $5 billion, were flat at 97.35 rupees by 2:40 p.m. when the Mumbai market was down 0.28 percent.

(Reporting by Kaustubh Kulkarni and Aradhana Aravindan in MUMBAI; Editing by Matt Driskill)

FILED UNDER:

Market Eye

REUTERS SHOWCASE

Setback For Sahara

Setback For Sahara

Supreme Court defers verdict on Sahara plea to raise more debt on hotels  Full Article 

SpiceJet Crisis

SpiceJet Crisis

SpiceJet says fleet grounded on lack of fuel  Full Article 

Drug Patents

Drug Patents

Novartis sues Cipla over respiratory drug Onbrez   Full Article 

Boost for Tata Steel

Boost for Tata Steel

Tata Steel restarts key iron mines amid shortage  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

India Outlook

India Outlook

ADB trims growth forecasts for developing Asia, says India to grow 5.5 pct in 2014  Full Article 

Real Estate

Real Estate

HDFC to raise $500 mln real estate private equity fund - sources  Full Article 

Banking Sector

Banking Sector

Japan banks to bulk up India presence on improving ties   Full Article 

U.S. Spending Bill

U.S. Spending Bill

Obama signs bill $1.1 trillion government spending bill  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage