Nomura: BHEL orders over Rs 53,000 cr may be cancelled

A casualty of the coal block allocation scam could be public sector equipment-maker Bharat Heavy Electricals Ltd (BHEL). According to global financial services group Nomura, BHEL may face cancellation of 28 per cent of its total order book. BHEL said it has an outstanding order book position of about Rs 1,32,900 crore at the end of first quarter 2012-13. Nomura says orders worth Rs 53,217.80 crore run the risk of cancellation. Of this, orders worth Rs 31,262.80 crore have already been classified as ‘slow’. The reasons cited by Nomura are: Either non-availability of coal linkage or cancellation of existing coal mine or linkage as a fallout of the allocation scam. However, those associated with BHEL say the company executes orders worth nearly Rs 50,000 crore annually. “Considering this, the order book is full for next 28-30 months.” DELAYS, DEFERMENT “While the status of coal mines allotted to BHEL remains uncertain, we highlight the potential risk to its order book from projects that were ordered on the back of these mine allocations,” Nomura analyst Amar Kedia told Business Line. Nomura has also indicated further risk to BHEL earnings in the current fiscal. The equipment maker could face delays in new order flows as well as order deferment. more at: http://www.thehindubusinessline.com/industry-and-economy/article3885976.ece?ref=wl_opinion