Reliance Energy net profit rises $63m on higher sales

NEW DELHI — Reliance Energy Ltd., India’s second-biggest utility by market value, said net income in the second quarter gained 34 per cent as electricity sales rose in the world’s second-fastest growing major economy.

By (Bloomberg)

Published: Thu 18 Oct 2007, 8:35 AM

Last updated: Sat 4 Apr 2015, 11:27 PM

Profit climbed to Rs2.5 billion ($63 million) in the three months ended Sept. 30 from Rs1.86 billion a year earlier, the Mumbai-based company said in a statement to the Bombay Stock Exchange yesterday. That beat the Rs2.15 billion estimate of five analysts surveyed by Bloomberg News.

Billionaire Chairman Anil Ambani’s Reliance Energy is the best performing stock among the benchmark Sensex stocks this year, climbing more than threefold as investors anticipate the company will benefit from a government programme to invest $100 billion in generation and transmission. The company plans to sell shares in a unit to build new plants.

“The future direction of the stock will depend on how well the power subsidiary’s IPO does,” said R.K. Gupta, who manages $75 million of stocks at Credit Capital Asset Management in New Delhi. “Higher energy sales and expansion will help the company grow in the coming quarters.”

Sales rose to Rs18 billion from Rs15.8 billion a year earlier, the company said. The company’s revenue from electricity sales rose to Rs12.76 billion from Rs9.16 billion a year earlier, the company said. Power Minister Sushil Kumar Shinde on Aug. 24 said the nation planned to add 78,755 megawatts of capacity in the five- year development plan ending March 31, 2012. That would add 60 per cent to current capacity of 132,330 megawatts. The earlier plan was to increase by 65,000 megawatts, or 49 per cent, of generation ability.

Reliance Energy plans to spend $15 billion to add 15,000 megawatts capacity, Ambani said on July 10. The company on July 30 said it won a contract to build a 4,000-megawatt plant in central India, and increase its generation capacity fivefold. The company’s Web site says its current capacity is 941 megawatts.