India's top power equipment maker Bharat Heavy Electricals Ltd may miss its new order target of 600 billion rupees ($13.2 billion) for the fiscal year ending this month as it faces a slowdown in domestic orders, its chairman said on Friday.The state-run firm hopes to garner several large orders in March as potential customers rush to complete their budgeted spending before the fiscal year-end, but may see some contracts pushed into the next year."The sector has been witnessing reduced growth because there are issues of environmental clearances, coal linkages, and also financial closures," BHEL Chairman and Managing Director B. Prasada Rao told Reuters by telephone."Things that took six months earlier, now take eight months, maybe," he added.
While India aims to halve its peak power deficit within two years and add generation capacity of 100,000 MW during 2012-17, delays relating to land acquisition, environmental issues and coal sourcing have hampered growth and dampened the overall investment climate in India.
A spate of corruption scandals, meanwhile, has slowed decision-making by the government, while rising interest rates are driving up costs."I expected a lot of hastening up of projects happening, but that has not happened," said Rao, adding that recent delays do not cloud the longer-term picture for order growth."It is very difficult to achieve, but I am still maintaining my guidance, if luck favours," he said, referring to the current fiscal year.Rival Larsen & Toubro warned in January it might not meet its full-year order book growth target without a pickup in the current quarter, blaming slower decision making for postponement in new orders.
BIG BACKLOG
BHEL, which faces intensifying competition from Chinese and South Korean rivals, won new orders worth 360 billion rupees in the first three quarters of the fiscal year, and had an order backlog of 1.58 trillion rupees at December-end.Industrial output growth in Asia's third-largest economy has slumped on the back of a high base effect and after a series of interest rate hikes by the central bank to curb high inflation.On Friday, government data showed industrial output in January rose an annual 3.7 percent, although IIP for the full year is expected to rise more than 8 percent.India's main stock index is down nearly 12 percent this year, among the worst performers among major Asian markets, as worries about corruption scandals and regulatory uncertainty keep investors on edge.India's top power equipment maker Bharat Heavy Electricals Ltd may miss its new order target of 600 billion rupees ($13.2 billion) for the fiscal year ending this month as it faces a slowdown in domestic orders, its chairman said on Friday.
The state-run firm hopes to garner several large orders in March as potential customers rush to complete their budgeted spending before the fiscal year-end, but may see some contracts pushed into the next year."The sector has been witnessing reduced growth because there are issues of environmental clearances, coal linkages, and also financial closures," BHEL Chairman and Managing Director B. Prasada Rao told Reuters by telephone."Things that took six months earlier, now take eight months, maybe," he added.While India aims to halve its peak power deficit within two years and add generation capacity of 100,000 MW during 2012-17, delays relating to land acquisition, environmental issues and coal sourcing have hampered growth and dampened the overall investment climate in India.A spate of corruption scandals, meanwhile, has slowed decision-making by the government, while rising interest rates are driving up costs.
"I expected a lot of hastening up of projects happening, but that has not happened," said Rao, adding that recent delays do not cloud the longer-term picture for order growth."It is very difficult to achieve, but I am still maintaining my guidance, if luck favours," he said, referring to the current fiscal year.Rival Larsen & Toubro warned in January it might not meet its full-year order book growth target without a pickup in the current quarter, blaming slower decision making for postponement in new orders.
BIG BACKLOG
BHEL, which faces intensifying competition from Chinese and South Korean rivals, won new orders worth 360 billion rupees in the first three quarters of the fiscal year, and had an order backlog of 1.58 trillion rupees at December-end.Industrial output growth in Asia's third-largest economy has slumped on the back of a high base effect and after a series of interest rate hikes by the central bank to curb high inflation.On Friday, government data showed industrial output in January rose an annual 3.7 percent, although IIP for the full year is expected to rise more than 8 percent.India's main stock index is down nearly 12 percent this year, among the worst performers among major Asian markets, as worries about corruption scandals and regulatory uncertainty keep investors on edge.
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