Standard Post with Image

BHEL bags just 21 Percent of target orders in Q1

The lack of fresh orders and a general slowdown in the power sector continues to trouble power equipment maker Bharat Heavy Electricals. The company bagged orders worth just INR 1,120 crore or 21.2 Percent of the Q1 target. The company is facing a tough time for last two financial years, when both its sales and profits took a big hit.

In 2013-14, BHEL for the first time even failed to meet the reduced turnover target of INR 43,000 crore, ending the year with a figure of INR 40,366 crore. The Q1 order booking is a fall of 23.6 Percent over the same period last year, when the company bagged orders worth INR 1,466 crore. As per the heavy industries ministry data, of the INR 1,120 crore order receipt in Q1, BHEL got more than half of the orders only in June when it bagged contracts worth INR 631 crore. But the June bookings reflects just 31.9 Percent of the monthly target of INR 1,979 crore.

Bhel is targeting to bag order worth INR 45,233 crore (including non-power business) in FY15. The April-June period target was INR 5,286 crore. But going by the initial numbers (of INR 1,120 crore), achieving the annual target seems remote which may hit company's topline. The main problem comes from the power business, considering that it represents three-fourths of its revenue generation from that segment. The company is set to declare its first quarter results this week.

Sources say that with the sluggish trend expected to continue in FY15, BHEL may end the year with an even lower turnover level of INR 34,000 crore. In 2012-13, BHEL's turnover crossed INR 50,000-crore mark.

“The situation as it exists today is very bad. Fresh orders have not picked up while execution of earlier orders have also slowed down. The company is now aggressively looking at the renewable sector to get business,” a company official.

The positive aspect of the numbers in the current fiscal is that while orders have slowed down, the company has performed better on production front, achieving 74.9 Percent of the Q1 target of INR 6,928 crore. Bhel has an order backlog of INR 1,01,538 crore at the end of 31.03.2014, which reduced further in Q1.

But company's turnover has reached just about INR 5,189 crore by the end of June quarter, which is just 11 Percent of the FY15 target of INR 45,600 crore. The quarterly turnover number has also reached just 74.9 Percent of the period target.

Source-On Request