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India's Tata Power reported marginally higher third-quarter profit on Friday, as higher costs weighed on strong energy demand.

The power transmission company reported a consolidated net profit of 9.53 billion rupees ($114.8 million), up a modest 0.8% from last year.

Higher power purchase and raw material costs ate into the company's revenue growth, which was buoyed by strong industrial output-driven power demand.

Its expenses rose 3.7% to 142.54 billion rupees, while revenue climbed proportionately to 146.51 billion rupees.

India's electricity generation climbed 8.7% year-on-year in the October-December period, owing to strong industrial demand, with peak average demand rising 13.8% to 218 gigawatts (GW), Investec analysts wrote in a note.

In October, the country's industrial output grew at its fastest pace in 16 months. It rose 2.4% in November, while data for December is due this month.

The higher demand had a largely positive impact on Indian power companies, as Power Grid, JSW Energy and Adani Power reported higher profits, although Torrent Power's profit fell due to higher fuel costs.

Shares of Tata Power ended down 3.8% ahead of the results.

($1 = 83.0010 Indian rupees)