BHEL expect increase in order book - Mr Rao, CMD, BHEL

Power equipment major Bharat Heavy Electricals is confident of maintaining its lead in the boiler turbine generator space.

Some brokerage reports had suggested that Larsen & Toubro has been disqualified from the 11x660 MW BTG bulk tender.

Commenting on the impending BTG bulk tender from NTPC for which even L&T is a contender, Mr BP Rao chairman of BHEL said that NTPC has called for its re tendering.

Mr Rao said that margins and market share are important and he expect public & private sector order book to grow. However, raw materials for the capital goods space remain a constraint but there is no constraint as far as BHEL's manufacturing capacity is concerned. In fact, for FY11, the company expects to manufacture 16000 MW versus 13000 MW in FY10.

Q - Earlier we spoke to L&T and the sense we get is that there is lot of competition which is now coming in this boiler turbine generator segment. We have players like BGR Energy also in the picture, some of these companies are bidding for same orders which you are bidding, in which you enjoy margins of about 18%. So going forward what would be the strategy, would you compromise on margins to maintain market share or would you let some of the market share go?

A - As I have been saying earlier competition is not just only on margin, there is a performance parameter which will get loaded otherwise performance is not good. So performance has to be one of the main factors and margins definitely will play a role and depending on the competitive situation we will play accordingly. There is no question of loosing our market share on this, the leadership of BHEL has to be maintained. So we will have a mix of strategies to maintain the market margins as well as retain the market share.

ref:
http://www.steelguru.com/indian_news/BHEL_expect_increase_in_order_book_-_Mr_Rao/156634.html