Bhel’s order flows expected to slow

Bharat Heavy Electricals Ltd’s (Bhel) results for the September quarter were slightly better than expectations. Revenue rose by 25.7% to Rs. 8,328 crore, and earnings before interest, tax, depreciation and amortization (Ebitda) grew by 32.5% to Rs. 1,632 crore. The Ebitda margin improved by around 100 basis points, which came as a positive surprise. One basis point is one-hundredth of a percentage point.

But note that margins would have been flat, but for a drop in net provisions made for contractual obligations, liquidity damage and doubtful debt. In last year’s September quarter, these provisions, accounted for in “other expenditure”, amounted to Rs. 82.2 crore. In the last quarter, they fell to around Rs. 35 crore, according to a report by Alchemy Research. Net of provisions, the improvement in margins would be just 20 basis points and the increase in Ebitda would have more or less tracked the rise in sales.

more at : http://www.livemint.com/2010/10/31211908/Bhel8217s-order-flows-expec.html