Wednesday, November 9, 2016

BHEL back with a bang; Posts profit after 14 quarters of negative growth

 Atul Sobti, CMD, BHEL
AFTER 14 straight quarters of negative topline growth, Maharatna PSU Bharat Heavy Electricals Limited (BHEL) posted a topline growth of 12 percent at Rs 6,780 crore and posted a profit before tax of Rs 138 crore as against a loss of Rs 293 crore in the same period last year. The turnover of the company increased to Rs 6,780 crore in Q2FY17, from Rs 6,070 crore during the corresponding period last financial year. The PSU said its...
strategic initiatives put in place by the new management have begun yielding results and the company is well on its way to getting back on the growth trajectory.
"We are resolutely focused on achieving the immediate target of regaining growth. Specific steps of expeditious execution and cost cutting coupled with efforts to enhance executable order book have been initiated by the company," said Atul Sobti, the newly appointed CMD of BHEL. The PSU said that as part of the new shift in the corporate plans, it will be creating new verticals to capitalise on the massive infrastructure spending by the government. "Special focus would be on Indian Railways, defence and other industrial products to drive the next wave of growth," said the company’s statement.
BHEL would also focus on sustainable energy development by offering engineering, procurement and construction (EPC) solutions in solar and an environment-friendly supercritical technology in the thermal sector. The engineering behemoth has an order book position of Rs 103,300 crore at the end of the second quarter of this financial year. In the first half of the current financial year, BHEL’s turnover has shown a double-digit growth of 19 per cent and profit after tax has increased to Rs 187 crore compared to a loss of Rs 130 crore in the corresponding period of the previous year. The lull in the power sector had affected the whole supply chain, with EPC players feeling the heat of decreased orders.
EPC companies like BHEL, Alstom India, Larsen & Tourbo, Lanco Infratech and Bharat Forge etc are witnessing subdued demand from the power sector which has led to their order pipeline going dry. Profits of BHEL plunged by 82 per cent during Q1 2015-16 over the past year, owning mostly to their decrease in sales to the power sector. Today, with 20,000 MW per annum capacity for power plant equipment manufacturing, BHEL's mammoth size of operations is evident from its widespread network of 17 manufacturing units, two repair units, four regional offices, eight service centres, eight overseas offices, six JVs, 15 regional marketing centres and current project execution at more than 150 project sites across India and abroad. BHEL also has a widespread overseas footprint in 76 countries with cumulative overseas installed capacity of BHEL manufactured power plants nearing 10,000 MW including Malaysia, Oman, Libya, Iraq, the UAE, Bhutan, Egypt and New Zealand.

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