MUMBAI, Jan 17 (Reuters) - Indian power producer Reliance Energy Ltd RLEN.BO said on Thursday its quarterly profit rose by half, helped by gains from a stronger rupee on its foreign borrowings.
The utility, which supplies electricity to parts of Mumbai and New Delhi, has diversified into engineering and construction such as building roads and airports and analysts said the new operations would be a key driver of growth in coming quarters.
Reliance Energy, part of India’s Anil Dhirubhai Ambani group, said it had orders worth 83 billion rupees ($2.1 billion) at the end of December.
“Engineering and construction would be the next thing to watch out for in the next few quarters in Reliance Energy,” said Mehul Mukati, analyst with Emkay Share and Stock Brokers Ltd.
The company has a capacity to produce nearly 1,000 megawatts of power, and owns 50 percent of Reliance Power Ltd whose record $3 billion initial public offer was fully subscribed within a minute of its opening on Tuesday.
Reliance Power aims to use the money to fund its projects for 28,000 megawatts across India.
Reliance Energy said net profit rose 50 percent to 3.02 billion rupees in the fiscal third quarter ended Dec. 31, from 2.01 billion a year ago. Net sales grew 34.4 percent to 12.3 billion rupees from 9.15 billion.
The company said it earned 600 million rupees in foreign exchange gains in the December quarter.
“We have foreign exchange borrowings and we do some hedging. From June 2007 we have started booking profit or loss based on actual realisation,” said a company official, who did not want to be identified because he was not authorised to speak.
He said the company sold 2,337 million units of electricity in the December quarter, up 5.2 percent from 2,221 million units a year earlier.
“We expect to grow at 7-8 percent in Mumbai for the next few quarters,” he said.
Shares in Reliance Energy had jumped more than four times in 2007, outperforming a 47 percent rise in the main BSE index .BSESN. The stock ended 2.4 percent down at 2,212.70 rupees on Thursday in a weak Mumbai market .BSESN that fell 0.8 percent. ($1 = 39.3 Indian rupees) (Reporting by Hiral Vora, Editing by Ranjit Gangadharan)
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