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Net rises 42% last fiscal; chalks plan for sustained growth

CHARTING GROWTH STRATEGY: Mr A.K. Puri, Chairman and Managing Director, BHEL (right), and Mr S.K. Jain, Director, HR, at a press conference in the Capital on Tuesday. — Kamal Narang

New Delhi April 3 Bharat Heavy Electricals Ltd (BHEL) has reported a 42 per cent jump in net profit at Rs 2,385 crore during 2006-07, compared with Rs 1,679 crore in the pervious year.

Buoyed by an all-time high order inflow, the company reported a 29 per cent jump in turnover at Rs 18,702 crore (Rs 14, 525 crore) during the last fiscal.

Announcing the provisional results for the last financial year, the BHEL Chairman and Managing Director, Mr Ashok K. Puri, said: "In sync with the buoyancy in the Indian economy, especially in the infrastructure and capital goods sectors, BHEL recorded an exceptionally high growth performance with across the board gains on all parameters in its areas of operations."

Growth plan

He said a strategic plan for ensuring a sustainable and profitable growth for the company had been drawn up to enable the company's turnover to grow from $4 billion at present to $10 billion by 2011-12. "Our fresh order inflows have swelled by 88 per cent in 2006-07 to Rs 35,633 crore, against Rs 18,938 crore in the previous year. We have doubled the turnover in the last three years. Our next target is to reach $10 billion by 2011-12," Mr Puri told presspersons.

The company is ramping up capacity to manufacture power equipment capable of generating annually a total 15,000 MW by 2012, he said. The company is already in the process of increasing the capacity to 10,000 MW from 6,000 MW at present.

Overseas buys

He said that the company had amended the Article of Association in September last year to go in for acquisition of companies overseas.

"The acquisition will be to get access to global market, niche technologies and solving supply chain for critical input materials," he said, adding that BHEL was looking at companies in the US and Europe.

BHEL has already constituted a group to scout for targets in these markets.

Nuke power sets

Mr Puri said BHEL is in talks with international nuclear power equipment makers including France's Alstom SA for a possible joint venture to manufacture high-end nuclear power equipment locally or for a technology licensing agreement.

However, the nuclear joint venture will hinge on the implementation of the Indo-US civil nuclear deal and subsequent Nuclear Suppliers Group waivers.

"We are already providing equipment to over 80 per cent of nuclear plants in the country and are planning to expand to high-rated sets as and when all clearances are available," Mr Puri said.

Oil rigs

BHEL is also in talks with Oil and Natural Gas Corporation (ONGC) to supply on-land oil rigs. "ONGC will be looking for 10-20 rigs in time to come. We are talking to them and are hopeful to get a large enough order," Mr A.K. Mathur, Director - Industrial Systems and Production, said at the press conference. He said BHEL expects to secure an order worth around Rs 680 crore for the supply of 10 rigs to ONGC. ONGC and BHEL are expected to finalise the order in the next six to eight months, Mr Mathur said. So far, BHEL has largely confined itself to refurbishing existing oil rigs.

More Stories on : Outlook | Electrical Goods | Bharat Heavy Electricals Ltd

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