India’s Reliance Energy Ltd reported quarterly net profit rose by nearly one-third, with future growth seen driven by engineering and construction business as it builds more roads and power projects.
Reliance Energy, part of the Anil Dhirubhai Ambani Group, said it had orders worth Rs7,850 crore as of 31 March, up by 50% from a year-ago period.
Lalit Jalan, a company director, told CNBC TV18 that the engineering, procurement and construction business should see strong growth in 2008-09.
The utility, which supplies electricity to parts of Mumbai and New Delhi, has diversified into engineering and construction such as building roads and airports.
“The engineering and construction business will drive future growth as it gets more orders,” an analyst from a local brokerage, who did not wish to be identified, said.
“(This is) also because the company is not adding more capacity to its power plant as its additional capacity plans have been moved to Reliance Power,” he added.
The company also announced on Monday that it had changed its name to Reliance Infrastructure Ltd with immediate effect.
The company has, either directly or through its subsidiaries, been engaged in a number of projects that are related not just to power generation, transmission and distribution, but also to highways, bridges, metro rail, airports and real estate, it said.
Diversification gains: Reliance Energy office in Noida. (Rajeev Dabral /Mint)
“The new name appropriately reflects the current nature of businesses (and) redefines the company’s focus,” it added.
Reliance Energy has the capacity to produce nearly 1,000MW of power. It owns 45% of Reliance Power, which made a dismal stock market debut in February after a record $3 billion (Rs12,060 crore) initial public offer in January and remains below its issue price.
Reliance Energy said net profit grew 31% to Rs311 crore in the fiscal fourth quarter ended 31 March, from Rs237 crore a year ago.
Total income for the March quarter was Rs1,977 crore, slightly higher than Rs1,890 crore a year ago.
The company said stand-alone net profit for the full year ending March 2008 was Rs1,085 crore, up 35.5% from Rs801 crore a year earlier, with net sales rising to Rs6,313 crore from Rs5,692 crore a year ago. The company said it sold 9,292 million units of electricity in 2007-08, up 6% from 8,766 units a year earlier.
Shares of Reliance Energy rose 5% to Rs1,426.10, their highest close since 5 March, in a Mumbai market that fell 0.6%.
The shares, which rose more than four times in value in 2007, fell 41.4% in the March quarter.
On Monday, Reliance Power also announced its results and said net profit for the year ended 31 March was Rs94.67 crore.
Total income for the year was Rs132.87 crore.
The company plans to build power plants across India using funds raised fromits initial share sale. Shares of Reliance Power closed at Rs403.25, up 0.27% or Rs1.10.
Another affiliate of Reliance Energy, Reliance Natural Resources Ltd reported a net profit of Rs68.55 crore for the year ended 31 March.
The company did not give year-earlier figures.
(Rina Chandran contributed to this story.)