Bharat Heavy Electricals Ltd (BHEL), India's largest power equipment manufacturer, reported a 51 per cent drop in net profit for 2013-14, the second consecutive decline in the company's annual profit.
The company reported a provisional net profit of Rs 3,228 crore, against Rs 6,614 crore in 2012-13. Constraints galore
Total sales fell 19.5 per cent to Rs 40,366 crore, compared with Rs 50,156 crore in 2012-13, Bhel said in a filing to the BSE.
"Profit impact is due to low volumes. Certain ongoing projects have been impacted, as the Indian power sector continues to be besieged with issues relating to fund constraints, land acquisition, clearances and coal linkages," the company said in a release.
The slowdown in announcements of new power projects dragged fresh order inflow down 11 per cent to Rs 28,007 crore from Rs 31,528 crore in 2012-13.
In 2012-13, new orders had jumped 43 per cent compared to 2011-12.
The share of the power sector to the overall value of new orders fell from 90 per cent in 2012-13 to 82 per cent in 2013-14. As of March-end 2014, the company's order book stood at Rs 1,01,538 crore, a 12 per cent fall compared with Rs 1,15,180 crore at the end of 2012-13.
Market share up
However, BHEL's overall market share rose from 68 per cent in 2012-13 to 72 per cent, "even while operating in a difficult business environment", the company said, adding focus on cost-optimisation through increased localisation of super-critical technologies, higher value addition, increased vendor base and design optimisation had supported its margins. Dues
BHEL has been grappling with about Rs 40,000 crore of payments due from customers. The company has, however, said the rising trend of debtors has been arrested, without giving details.
In 2013-14, the company accounted for 13,452 Mw of power plant capacity commissioned in the domestic and international markets - 11,266 Mw in the power utility segment,1,698 Mw of captive sets and 488 Mw in foreign markets. In 2013-14, the first BHEL-manufactured 660-Mw super-critical unit for NTPC at the Barh power plant and the first 800-Mw boiler for Andhra Pradesh Power Development Corporation at Krishnapatnam were commissioned.