BHEL has the first-mover advantage if growth recovers this year

Bharat Heavy Electricals Ltd (BHEL) has been facing headwinds for many quarters as the country's power sector undergoes a crisis of sorts. However, the state-run company has made huge investment in capacity expansion to keep itself ready for any revival in the economy. In the last five years, BHEL has invested Rs 6,660 crore in building new factories and expanding existing units. The manufacturing capacity has increased to 20,000 Megawatts (Mw) per annum, highest among all power-equipment vendors in India. In comparison, its main competitor, Larsen and Toubro invested around Rs 1,000 crore in expanding its machinery and industrial products division during the period. BHEL's other two competitors in the power equipment sector, Siemens and ABB, spent around Rs 1,000 crore each on expanding their manufacturing footprint during the period. This puts the company in a favourable position to meet the demand once growth recovers and even grab market share from competitors. During the boom period, from 2005-06 to 2010-11, the company was short on capacity opening opportunity for its competitors. BHEL's market share in new orders declined to 41 per cent during the 12th Plan period from 49 per cent in the previous one. The gainers were Chinese vendors, which grabbed a third of the new orders during the 12th Plan against 22 per cent in the previous period. more at: http://www.business-standard.com/article/companies/bhel-has-the-first-mover-advantage-if-growth-recovers-this-year-113042900007_1.html