Power equipment maker Bharat Heavy Electricals Ltd (BHEL) has reported an over 62 per cent dip in net profit for the just concluded fiscal, according to the flash results approved by its Board of Directors on Monday.
“(The) profit impact is due to low volumes as a result of the retarding force of the last three years’ market shrinkage due to issues relating to coal linkages, fund constraints, land acquisition, clearances, etc,” the company said in a statement.
Despite a dip in the profit and turnover, BHEL shares closed at ₹235 on the BSE on Monday, up 1.38 per cent over Friday’s closing price. The market expressed optimism as the company’s order book has grown.
BHEL secured orders worth ₹30,814 crore during 2014-15, an increase of 10 per cent over last year from its diversified business segments covering both domestic and international markets. Orders in the power sector at ₹24,873 crore witnessed a 22 per cent rise. The company booked ₹720- crore orders for exports and ended the year with a total order book of over ₹1.01 lakh crore. The company also said its margin had improved. “Focus on cost optimisation through increased localisation of super critical technologies, higher value additions; increased vendor base and design optimisation efforts aided the company in its margins,” the statement said.
BHEL’s focus on cash realisation during the year resulted in retaining the surplus cash. The rising trend of debtors has also been arrested, it added.
The company commissioned/ synchronised capacity of 11,941 MW. This is the third year in a row when it managed to set up 10,000 MW or more capacity. With this, it surpassed the total capacity addition achieved in the 11th Five-Year Plan in the first three years of the 12th Five-Year Plan itself. It also exceeded the Power Ministry’s target for 2014 –1 5 by 19 per cent. BHEL has around 72 per cent market share.
BHEL spent 3.26 per cent of its turnover on research and development in 2014-15 compared to 2.78 per cent in 2013-14. This led to filing of 450 patents/ copyrights during 2014-15, which is an all-time high. The company has signed a memorandum of understanding with HSL and MIDHANI and formed a consortium for building indigenous P75I submarines.