Public sector Bharat Heavy Electricals (BHEL) continues to be bogged down by the dismal flow of new orders and the resultant drop in the orders at hand, a preview of its yet-to-be-released December quarter figures by FE show. The company is facing the grim prospect of not meeting even its internally downwardly revised turnover target of Rs 43,000 crore for 2013-14.
Persisting with the trend since 2011-12, the capital goods manufacturer booked fresh orders worth just R7,197 crore in October-December 2013, or 47% of the quarter's R13,696-crore target. This means that including R4,470 crore of orders received in the first half, BHEL could manage to get fresh orders of just R11,667 crore in April-December. That was just 21% of the target of Rs 54,714 crore for all of 2013-14. BHEL’s new orders stood at Rs 60,507 crore in 2010-11.
As per ministry of heavy industries data, till end-December BHEL's turnover was R24,799 crore, or just 58% of the annual target, with fresh orders hitting just about 34% of the target for the period.
It looks likely that the company would even struggle to take its new order achievement this year to last year's level of R31,650 crore, although it expects to clinch some big orders in the last quarter.
The company, which reported a more than halving (64% drop) of net profit to Rs 456 crore in the second quarter of this fiscal on a 15% drop in net sales to R8,819 crore, has internally kept its top-line target for this fiscal at R43,000 crore, less than last year’s achievement of R50,156 crore and the R49,510 crore clocked in FY12.
Not achieving even the revised target could be an unprecedented development for the engineering major, which has consistently posted an increase in turnover in absolute terms.
“The situation as it exists today could also result in a turnover of even lower than Rs 40,000 crore (for 2013-14). However, all hopes are on the last quarter when bids for a substantial portion of 16,500 MW of new capacity are expected,” said a company official, who did not wish to be identified.
On a positive note, however, BHEL's April-December new orders grew 9.1% over orders worth Rs 10,693 crore booked in the same period of the previous fiscal. The company is set to declare its third-quarter results next week.
According to company sources, apart from the unanticipated delays in award of two ultra mega