Bharat Heavy, Larsen, NTPC Surge on Nuclear Waiver...

Bharat Heavy Electricals Ltd., Larsen & Toubro Ltd. and NTPC Ltd. rose more than 10 percent in Mumbai trading after India unexpectedly won the right to buy atomic fuel and know-how from a group of nuclear-technology supplying nations.

Larsen, India's biggest engineering company, gained 4.6 percent to 2,737.5 rupees at the end of market. Bharat Heavy, India's biggest power-equipment maker, rose 3.4 percent and New Delhi-based NTPC, India's top power producer, rose 4.6 percent.

A group of 45 countries on Sept. 6 granted a waiver for sales to India outside the nuclear Non-Proliferation Treaty. The exemption, which must be ratified by the U.S. Congress before it adjourns on Sept. 26, may generate $10 billion of orders for companies including Larsen and Bharat Heavy, according to UBS AG.

``Today's rally is sentiment driven,'' said Kunal Sheth, an analyst at Religare Securities Ltd. with a ``buy'' rating for Larsen and an ``accumulate'' rating for Bharat Heavy. ``These companies will only gain once the orders start flowing, which will be after a time lag.''

The waiver will help India lift its nuclear-generating capacity to 40,000 megawatts by 2020, sufficient to light up four cities the size of New York. India has 4,120 megawatts of nuclear capacity, is building 3,160 megawatts and plans to add 7,900 megawatts outside the accord, according to the Nuclear Power Corp. of India Ltd., the nation's monopoly nuclear-power producer.

End of Ban

The suppliers' group ended the three-decade old ban after promises that India will keep its moratorium on nuclear-bomb testing, which brought on the sanction in the first place. India says it needs atomic fuels and technology to meet a power shortage of as high as 17 percent during peak hours as the economy has grown more than 8 percent annually since 2003.

The deficit will balloon to an estimated 412,000 megawatts by 2050, almost triple the nation's current capacity unless the nuclear agreement goes through, Foreign Minister Pranab Mukherjee told lawmakers in July.

Bharat Heavy Managing Director K. Ravi Kumar said the same month the company plans to triple investments in nuclear components once overseas companies are allowed to supply fuel and technology. The company aims to spend 15 billion rupees ($339 million) in two years building plants to supply components for reactors with 1,600 megawatts of capacity, Kumar had said.

Larsen plans to form a 20 billion rupee forging unit with Nuclear Power Corp., Chairman A. M. Naik said earlier.

``Larsen is only one which can make very heavy reactors,'' he said in a July interview. ``Our technology shop has been approved by nuclear technology majors so we are prepared to start work.''

The nuclear accord can generate more than $10 billion of orders for Indian companies, including Bharat Heavy and Larsen by 2012 if the planned projects are awarded, UBS analysts Suhas Harinarayanan and Pankaj Sharma wrote in a July 10 client note.