NTPC Provisional Net Rises Slowest in Four Years on Missed Capacity Target

NTPC Ltd., India’s biggest power producer, said full-year profit rose a provisional 5.6 percent, the slowest pace in four years, after missing its target of adding generation capacity. The shares declined.

Net income in the 12 months ended March 31 rose to 86.6 billion rupees ($1.9 billion) from 82 billion rupees a year earlier, according to a statement of preliminary earnings issued in New Delhi today. That compares with the 89.6 billion rupee mean estimate of 11 analysts surveyed by Bloomberg. Provisional sales were 465 billion rupees compared with 417.9 billion rupees.

NTPC plans to almost double generation capacity by 2012 to meet energy demand and reduce blackouts in the world’s second- fastest growing major economy. The government estimates the economy may expand 8.25 percent to 8.75 percent in the 12 months through March.

NTPC shares have risen 7 percent in the past year, trailing the 59 percent increase in the benchmark Sensitive Index. The stock fell 0.9 percent to 204.80 rupees at the close in Mumbai trading, the lowest level since March 30.

“Profit growth was slower because last year we had an income-tax refund,” R.S. Sharma, chairman and managing director, said in New Delhi today, without giving more information.

The state-owned utility based in New Delhi plans to more than double spending to 223.5 billion rupees this year, adding 4,150 megawatts of capacity. That compares with 101.4 billion rupees spent a year earlier, when 1,560 megawatts were added, according to the statement.

Target Capacity

NTPC will miss its target of adding 3,300 megawatts of generation capacity in 2009-10 because of equipment delays, Sharma said in January.

The company is considering a plan to raise $500 million by selling debt overseas and will be “comfortable” with paying a 5.5 to 6 percent interest rate on the debt, A.K. Singhal, director of finance, said in New Delhi today. It tied up 168.2 billion rupees of loans in the year that ended March 31, according to the statement.

NTPC plans to import 14 million metric tons of coal in the year that began April 1, Sharma said. The New Delhi-based company will burn 145 million to 150 million tons of coal in the year, he said.

To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net.

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