India’s state-owned Bharat Heavy Electricals Ltd reported a 34.2% fall in quarterly profit on Friday, hurt by a rise in total expenses despite the surging power demand in the country. Standalone net profit fell to 5.98 billion Indian rupees ($72.4 million) for the fourth quarter ended Mar. 31, from 9.09 billion rupees a year earlier, the company said in an exchange filing. Total expenses rose 5.4% due to a sharp rise in input costs led by raw materials that had gone up 23.9% year-on-year.

Power generation equipment manufacturer BHEL benefits from the rising demand of electricity in the country as, according to the company’s data, it has nearly 57% share in India’s total coal-based power generation. However, Indian government plans to stop building new coal projects to fight climate change, as per the latest amendment in its power policy draft as it aims to achieve net zero emissions by 2070.

The quarterly income from operations of the New Delhi-based company rose 2.9% to 78.19 billion rupees. Revenue at power unit, BHEL’s biggest segment constituting 78.9% of total revenue, increased 3.9% from a year earlier, while the revenue from industrial segment fell 0.7%. BHEL has been expanding on its industrial segment to gain from the increased government spending on infrastructure projects post pandemic-led halt as the country nears general elections scheduled for next year.

During the quarter, BHEL had strong order activities, winning bids like renovation & modernisation of steam turbines at Ukai Thermal Power Station in Gujarat. Last month, BHEL in consortium with Titagarh Wagons Ltd won order for supply of 80 Vande Bharat trainsets by Indian railways. BHEL’s earnings come in stark contrast with rivals Siemens Ltd, Larsen & Toubro Ltd who posted higher profits for the March quarter. BHEL’s stock closed down 3.6% at 78.95 rupees ahead of the results.