These are probably the best times for the domestic equipment manufacturing company-Bharat Heavy Electricals Limited (BHEL). Notwithstanding a record high order book position of about Rs 85,000 crore, BHEL is all set to bag bulk orders for supplying equipment to the power projects of both, the private and public sector companies, planned for execution during the 11th plan period.
While the cabinet is expected to shortly give its go-ahead for the supply of 10 supercritical sets of 800 MW each for NTPC?s projects, that is for a total of around 8,000 MW of capacity, private sector companies like Tata Power and Reliance Power, too, are in talks with BHEL for placing bulk orders for procuring equipments worth 5,000 MW and 4000 MW respectively, for their power plants.
A look at the company?s financial performance during the year shows that despite a slowdown in the growth of the capitals good sector in the last quarter of 2007-08, BHEL posted a net profit of Rs 2,815 crore in 2007-08, a 16.6% rise from the previous year. BHEL?s annual turnover crossed the Rs 20,000-crore mark. The turnover rose to Rs 21,608 crore in the year 2007-08, up 15% from Rs 18,739 crore a year ago. The company had reported a net profit of Rs 2,415 crore in 2006-07.
Ravi Kumar, chairman and managing director, BHEL said the company envisages an investment of Rs 4,200 crore in the 11th-Plan period. The amount would be utilised toward enhancing production of thermal, gas, hydro, and nuclear sets. Besides, the company seeks to produce high rated nuclear sets, 765kV transformers and other ancillary equipment.
The order book position of BHEL stood at about Rs 85,000 crore and crossed the Rs 50,000-crore mark during 2007-08. During 2007-08 alone, the order book of BHEL crossed the Rs 50,000-crore mark and rose 41% to Rs 50,265 crores, up from Rs 35,643 crore in 2006-07. The order inflow rose 41% to Rs 50,265 crore in 2007-08, up from Rs 35,643 crore in 2006-07.
Even during 2008-09, BHEL says it does not expect a slowdown in orders and is hoping to secure orders between Rs 40,000 to 50,000 crore in 2008-09. The guidance given by BHEL on its expected performance for 2008-09 includes the growth in its turnover to Rs 25,000 to Rs 27,000 crore and a over 26% growth in its net profit.
The company is also expanding into manufacturing of metro coaches and IGBT-based propulsions systems to gain from emerging opportunities in this segment. BHEL?s metro coaches would be manufactured at its existing facility at Jhansi in Madhya Pradesh.
The installed capacity of BHEL-supplied utility sets has gone up to 86,789 MW and BHEL maintains 64% of the country?s total installed capacity of 1,34,697 MW. The firm has doubled its investment on augmentation of manufacturing capacity and modernisation of facilities to Rs 726 crore during 2007-08, against Rs 362 crore in 2006-07. It has also scaled up its capacity to 10,000 MW and would further augment it to 15,000 MW by end-2009.
BHEL has also formed a joint venture company with NTPC to manufacture equipment for power projects. The new facilities for manufacturing turbines and boiler sets are expected to come up at Pune in Maharashtra and at Vizag in Andhra Pradesh. The manufacturing capacity of this new greenfield capacity will be around 4000 to 5000 MW.
