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Wednesday, April 4, 2012

BHEL looking beyond power to propel growth

BHEL plans to attract more business from the oil and gas, transportation, renewable energy and defence sectors. This is because of the waning demand from the power vertical.

Mr B. Prasada Rao, Chairman and Managing Director, BHEL, said orders worth Rs 5,800 crore had been cancelled by the third quarter of 2011-12. Last fiscal, only projects totalling 4,000 MW were finalised due to issues such as land acquisition, financing and coal linkage, as against around 16,000 MW in 2010-11.

In oil and gas, BHEL aims to become a sub-supplier to offshore rig builders. It is also addressing a big order from Delhi Metro, planning alternative propulsion for railway locomotives, and building a new factory for windmills. For Defence, it is looking at a technical partner to make large naval guns.

“From our cash reserves of Rs 6,800 crore, we will spend on capital investments, such as a locomotive factory at Jhansi, and in joint ventures,” Mr Rao said at an annual press conference here on Tuesday.
Higher volumes

According to its provisional results for 2011-12, BHEL posted 21 per cent higher net profits at Rs 6,868 crore, while the turnover is up 19 per cent at Rs 49,301 crore.

“Profit growth is mostly due to higher volumes — most of our capacity addition has come on stream. For capital expenditure, we have outlined around Rs 1,000 crore, most of which will be on the nuclear power joint venture (with NTPC),” Mr P. K. Bajpai, Director, Finance, said.

In 2012-13, the public sector utility expects its power business to grow steeply with Rs 40,000 crore worth of fresh orders from power generation projects. This is apart from an existing Rs 1.35-lakh crore of outstanding deliveries across sectors.

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