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India's Bharat Heavy Electricals (BHEL) reported third-quarter profit below estimates on Tuesday as a surge in expenses outweighed a modest rise in power demand.

The power and industrial equipment manufacturer reported a net profit of 1.25 billion rupees ($14.5 million) for the three months ended Dec. 31, compared to a loss of 2.13 billion rupees a year earlier.

Analysts, on average, had estimated a profit of 1.68 billion rupees, as per data compiled by LSEG.

BHEL's total expenses surged 31% to 72.25 billion rupees, owing to a 22% rise in input costs. It also incurred 9.07 billion rupees worth of "other expenses", without specifying details.

Meanwhile, domestic power generation rose in the October-December quarter, although it grew only 3% compared to 12% a year earlier. Power growth slowed down in the latter half of 2024, Reuters reported earlier this month.

The slowdown in power generation comes in line with the country's manufacturing activity growth, which remained tepid for two of the three months in the period but grew on a year-on-year basis.

Revenue from operations jumped nearly 32% to 72.77 billion rupees in the quarter, owing to a 32% rise in revenue from the power segment.

BHEL is the first among its peers to report quarterly results, with larger rival Tata Power set to post quarterly earnings next month.

($1 = 86.5150 Indian rupees)