Reliance Power , India's second-largest private electricity producer by market value, posted a 23 percent rise in first-quarter net profit, in line with expectations, as generation capacity doubled compared to the previous period.
Net profit rose to 2.40 billion rupees in April-June from 1.96 billion rupees. Sales doubled to 11.36 billion rupees, the company said in a statement. Analysts had expected a profit of 2.4 billion rupees on sales of 9.92 billion rupees, according to Thomson Reuters I/B/E/S.
Reliance Power, controlled by billionaire Anil Ambani, operates 1,540 MW capacity and is set to more than triple that to 5,000 MW by December 2012.
However, on two other giant projects totalling 6,400 MW, the company has run into roadblocks. These projects have been stalled due to scarcity of cheap fuel. Reliance Power did not specifically talk about the two projects in the statement. It is holding a news conference later on Tuesday.
A shortage of cheap local fuel has forced many power plants to run below capacity in India, where about 15,000 MW capacity lies idle and which suffered one of the world's worst power blackouts a fortnight ago, affecting about half of the country's 1.2 billion population.
An unwillingness on the part of cash-strapped state-owned distributors to buy more expensive power has curtailed prospects for raising fuel imports instead.
Delayed environmental clearances, land acquisition difficulties and failure to invest enough in new mines and technology has slowed production growth at near-monopoly state-run Coal India , while domestic gas output has declined.
Also Read
LEGAL WRANGLE
Reliance Power is caught in a legal wrangle with four state governments over a $3.2 billion plant in the southern state of Andhra Pradesh.
It faces the risk of losing its 4,000 MW Krishnapatnam project as well as bank guarantee of 3 billion rupees after a court rejected its plea to raise tariffs. An appeal by Reliance Power is pending in another court.
At another plant in Andhra Pradesh, the $1.8 billion 2,400 MW Samalkot plant, a gas shortage means the first phase of the project is ready but can't operate.
Reliance Power has been lobbying the government to import gas to meet the shortfall in local supply and charge an average price from all buyers.
Falling output at the KG-D6 block off the eastern Indian coast and opposition from plant owners with assured cheap local supply have kept the proposal grounded.
Reliance Power said construction at the 4,000 MW Sasan project in the central state of Madhya Pradesh was progressing and the project had secured a $1.1 billion loan from Chinese banks and $800 million from US-Exim Bank and Standard Chartered Bank , the company said in a statement.
At 0700 GMT, the company's shares, valued at $4.7 billion, were trading 1.8 percent higher at 93.90 rupees in a Mumbai market that was up 0.53 percent.