(Updates with analyst comment in fourth paragraph.)
Nov. 7 (Bloomberg) -- Essar Energy Plc, a U.K.-listed Indian energy producer and oil refiner, said power output grew in the third quarter on demand from Gujarat’s state utility.
Generation grew 3.7 percent to 1,553 megawatt hours from the prior three months, it said in a statement today. For the first nine months it was down 2.2 percent at 4,848 megawatt hours. The Vadinar oil refinery processed 3.03 million metric tons in the quarter, down 18 percent, after a planned shutdown.
Essar, 49 percent lower this year in London trading, is pursuing 14 growth projects and plans to complete the Mahan I, Salaya I and Vadinar P2 coal-fired power plants by the end of March. The company is awaiting approval to clear forests for its Mahan, Chalka and Ashok Karkata coal blocks to fuel the Mahan I and Tori stations. Meetings with the government panel in charge of resolving approvals have been “positive,” the utility said.
“There remain risks around securing domestic coal for its power stations, although we continue to see the shares as materially undervalued,” Deutsche Bank AG analysts James Brand and Lucas Herrmann wrote in a note to investors today.
Once approved, the mines will begin producing their first coal within 15 to 18 months, with the expansion to full capacity taking as long as three years, the company said.
The Essar Group subsidiary, founded by billionaires Shashi and Ravi Ruia, plans to boost its generating capacity to 11,500 megawatts by 2014 to meet increasing Indian demand. About 45 percent of the country’s households don’t have access to power.
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