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BHEL retains its leadership position in difficult market

Bharat Heavy Electricals Limited (BHEL) has retained its market leadership position during 2013-14 even while operating in a difficult business environment. Improved focus on project execution enabled the company record highest ever commissioning/synchronization of 13,452 MW of power plants in domestic and international markets in 2013-14.

Both power & industrial market segments in which the company operates continued to witness fewer project finalizations. BHEL secured orders worth Rs. 28,007 Crore from its diversified business segments covering both domestic and international markets. Orders in industrial segment at Rs.5,007 Crore witnessed a 23% jump; Spares & Services at Rs.3,433 Crore saw a jump of 19% and International segment at Rs.2,567 Crore witnessed a jump of 28% in 2013-14. The company ended the year with an order book of Rs.1,01,538 Crore.

BHEL bagged a mega EPC order worth Rs. 7,900 Crore for 3x660 MW Supercritical units from NTPC for North Karanpura project against stiff International competition. With this, the company’s market share in Power Sector in the country was 72% during 2013-14, further strengthening its leadership position.

BHEL recorded a turnover of Rs.40,366 Crore (prov.) and a Net Profit of Rs.3,228 Crore (prov.) during 2013-14. Profit impact is due to low volumes. Certain ongoing projects have got impacted as the Indian Power Sector continues to be besieged with issues relating to fund constraints, land acquisition, clearances and coal linkages. Focus on cost optimization through increased localization of super critical technologies, higher value additions; increased vendor base and design optimization efforts aided the company in its margins.

Company’s focus on cash realization during the year has resulted in coming back to cash surplus situation after a gap of four years. The rising trend of debtors has also been arrested.

BHEL’s commissioning/synchronization of 13,452 MW included 11,266 MW in the utility segment; 1,698 MW Captive/Industrial sets in the country and 488 MW in overseas market. The significant among them was the commissioning of first BHEL manufactured 660MW Super-critical unit for NTPC at Barh and the first 800 MW Boiler for APPDCL at Krishnapatnam.

In addition, company commissioned the first indigenously built 765 KV substation at PGCIL-Raichur, six months ahead of schedule, enabling Southern grid getting connected to National grid system - a long cherished dream of having ‘One Nation-One Grid-One Frequency’ realized successfully.

The company successfully manufactured, tested and supplied new generation AC-AC variable frequency drive (VFD) 2000 HP Oil Rig to ONGC.

The plant load factor of all BHEL supplied sets in the country was 1.6% more than that of all India average. 35 BHEL supplied sets achieved a PLF of over 90% while 79 sets achieved a PLF of 80-90% during 2013-14 – a testimony of better performance from BHEL supplied sets.

BHEL, which ranks among the highest R&D spenders in the country in the engineering and manufacturing segment, spent 2.78% of turnover on R&D in 2013-14 compared to 2.49% in 2012-13. Increased R&D efforts have led to filing of nearly two patents/ copyrights every working day. 434 patents / copyrights filed during 2013-14 were an increase of 13% over 2012-13. The company’s R&D efforts are being directed towards developing new products using state-of-the-art technologies and processes, relevant to the needs of the country to remain current both in terms of technology and features vis-à-vis global benchmarks.

Fiscal 2013-14 was a year in which BHEL has made significant progress in consolidating its strengths and value propositions to emerge even more competitive for tapping opportunities in the next phase of economic growth of the country.

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