BHEL sees Rs 60K cr orders this fiscal

Bharat Heavy Electricals Ltd (BHEL), the engineering & power equipment major, expects to close financial year 2008-09 with an order backlog of Rs 1,20,000 crore. K Ravi Kumar, chairman and managing director, on Friday said the state-run company is expecting orders worth Rs 50,000-60,000 crore in the next financial year. This fiscal, too, it expects orders worth Rs 60,000 crore. In the fiscal nine months ended December 31, 2008, BHEL booked orders worth Rs 44,088 crore for equipment to generate 13,600 megawatt of electricity, Kumar said. On Thursday, the company received orders worth Rs 7,000 crore, which would reflect in the fourth quarter of the current fiscal, he added. The company had an order backlog of Rs 1,13,500 crore at the end of the December quarter. BHEL expects to grow its revenues by 30% to Rs 27,000-28,000 crore in FY09 from Rs 21,498 crore in FY08, Kumar said. "Our work-in-progress in the December quarter was quite high and will translate into higher production in the fourth quarter of FY09," he added. In the nine months ended December 31, 2008, BHEL's net profit grew 2.4% year-on-year to Rs 1,790.74 crore. Revenues grew 25.24% to Rs 16,955.12 crore. The low growth in net profit was attributed to higher provision for employee wages, which are in for a revision in line with the Centre's policy, and to higher raw material costs that are pressurising margins. The company has set aside Rs 1,313 crore for higher wages in FY09. C S Verma, director (finance), said, "We will reassess if this provision is enough but as per estimates we feel even this much won't be required." BHEL's raw material costs have gone up this fiscal due to the rise in commodity prices earlier. The recent crash in prices hasn't translated into savings for the company yet as it keeps an inventory of six months for imported raw material and of three-four months for indigenous. Raw material costs accounted for 62% of BHEL's revenues in the December quarter compared with 58% in the same quarter in FY08, Kumar said. He expects input costs to be 60% of revenues in FY09 against 58% last fiscal.