BHEL: Brisk business despite downturn


Despite the economic downturn, Bharat Heavy Electricals Ltd (BHEL) is doing brisk business. The pace of power equipment supply inflows to the company remains unaffected. Even order flows from private project developers are affected only nominally, BHEL Chairman K Ravikumar tells Hardnews.

Noor Mohammad, Delhi

While capacity addition in many industrial sectors has slowed down in the wake of the global credit crunch and economic recession, the Indian power sector is still going strong. This is borne out by the robust order books of BHEL, India's biggest power equipment supplier. The company has received power equipment supply orders worth Rs 44,407 crore in the financial year 2008-09. The combined capacity of these projects is 17,020 MW. Just one supply contract worth Rs 1,000 crore has soured, BHEL Chairman K Ravikumar told Hardnews on the sidelines of a press conference to announce the company's annual results.

However, the pay revision implemented by the company seems to have adversely impacted its profitability. For example, BHEL reported a turnover of Rs 27,505 crore during 2008-09, the highest ever for the company. This was 29 per cent higher compared with the preceding fiscal. However, the company's profit before tax (PBT) rose by 2 per cent. However, if the impact of the pay revision is discounted, the growth in the company's PBT works out to 21 per cent.

The company made capital expenditure of Rs 1,106 crore during this period, compared with Rs 726 crore in the preceding year. During the same period, the company's research and development (R and D) expenditure rose from Rs 464 crore to Rs 650 crore.