The CEO of the NTPC-Bhel JV company - NTPC Bhel power projects Ltd - will be finalized by July end, the ministry of power informed today.
"For finalising the CEO of the company, a high level search committee of six members headed by the secretary, Heavy Industries has already been set up which will submit its findings by 31 July" said Jairam Ramesh, minister of state for power.
The minister was inaugurating the office of the 50:50 joint venture company of the two power sector giants set up to primarily undertake power equipment manufacturing.
"The JV company has been set up to undertake three important tasks- equipment manufacturing, taking up engineering, procurement and construction (EPC) contracts and to make balance of plant (BoP) equipments like ash-handling plants" said Ramesh.
The MoU for the joint venture was signed by the two companies in September last year and the company was formally incorporated in April 2008.
The minister informed that the draft of the company's business plan is being worked out currently and will be finalised in June.
Two project sites - one in Bamnauli in Delhi and the other in Vaishali in Bihar - have already been identified for locating the manufacturing units. The Bamnauli plant will have a manufacturing capacity of 750 Mw and the Vaishali plant will have a capacity of 500 Mw. The company is now planning to set up an overseas manufacturing base also.
NTPC-Bhel power projects Ltd will have a total equipment manufacturing capacity of 4,000 Mw per annum which will be commissioned in the next 4-5years. Both the companies together plan to invest Rs 5,000 crore in the venture over a period of five years.
Bhel already has a manufacturing capacity of 10,000 Mw and is in the process of increasing it to 15,000 Mw by 2012. It has bagged 48 per cent of the equipment orders for the 11,061 Mw capacity addition planned in 2008-09 . The company is now planning to set up in-house fabrication units in a bid to reduce transportation costs of the equipments.
"Rise in fuel prices has lead us to plan fabrication units for equipments like duct columns at project sites only" said Ravi Kumar, chairman and managing director, Bhel.
The stocks of Bhel at the Bombay Stock Exchange closed today at Rs 1,444.80 today, down 1.80 percent from the previous day's close. NTPC's stocks closed higher 5.57 percent at 166.65.
ref:
http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=39309
Showing posts with label BHEL. Show all posts
Showing posts with label BHEL. Show all posts
Friday, June 6, 2008
Tuesday, May 27, 2008
BHEL, Italian co in race for Rs 1,300 cr NLC order
Bharat Heavy Electricals Ltd (BHEL) and the Italian power major, Ansaldo, are in the race for supplying boilers to Neyveli Lignite Corporation’s Tuticorin project. The value of the order would be around Rs 1,300 crore.
A joint venture of Neyveli Lignite Corporation (NLC) and the Tamil Nadu Industrial Development Corporation (TIDCO) of the Tamil Nadu Government is investing Rs 4,950 crore in the 1,000-MW, coal-fired thermal project. NLC has 89 per cent stake in it.
BHEL wins Rs 1,150 cr contract in Punjab from HPCL, Mittal
The value of boilers and turbines for the project works out to around Rs 2,200 crore. NLC invited ‘expression of interest’ for each equipment. BHEL was the sole respondent for supplying the turbines, whose value would be around Rs 900 crore. BHEL and Ansaldo have shown interest in supplying the boilers.
“We will shortly open the technical bids, after which we will open the financial bids,” V Sethuraman, Director-Power, NLC, told Business Line today.
NLC’s Chairman and Managing Director, S Jayaraman, said that the project would not use supercritical boilers, which, though costlier, are said to be more energy efficient.
The Tuticorin project is NLC’s first foray into coal-fired power plant and as such the company would not like to go in for the supercriticals, whose performance is yet to be experienced in India, he said.
However, for the other project on the drawing board — the 2,000-MW Hirma project in Orissa — NLC may opt for supercritical boilers, he said.
Jayaraman said that the Chinese power equipment manufacturers had not responded to NLC’s invitation for Expression of Interest.
Sources in the company said that this was probably because the Chinese suppliers are experts only in producing equipment for 600 MW units, where they are cheaper because of the standardised design.
ref:
http://sify.com/finance/fullstory.php?id=14682474
A joint venture of Neyveli Lignite Corporation (NLC) and the Tamil Nadu Industrial Development Corporation (TIDCO) of the Tamil Nadu Government is investing Rs 4,950 crore in the 1,000-MW, coal-fired thermal project. NLC has 89 per cent stake in it.
BHEL wins Rs 1,150 cr contract in Punjab from HPCL, Mittal
The value of boilers and turbines for the project works out to around Rs 2,200 crore. NLC invited ‘expression of interest’ for each equipment. BHEL was the sole respondent for supplying the turbines, whose value would be around Rs 900 crore. BHEL and Ansaldo have shown interest in supplying the boilers.
“We will shortly open the technical bids, after which we will open the financial bids,” V Sethuraman, Director-Power, NLC, told Business Line today.
NLC’s Chairman and Managing Director, S Jayaraman, said that the project would not use supercritical boilers, which, though costlier, are said to be more energy efficient.
The Tuticorin project is NLC’s first foray into coal-fired power plant and as such the company would not like to go in for the supercriticals, whose performance is yet to be experienced in India, he said.
However, for the other project on the drawing board — the 2,000-MW Hirma project in Orissa — NLC may opt for supercritical boilers, he said.
Jayaraman said that the Chinese power equipment manufacturers had not responded to NLC’s invitation for Expression of Interest.
Sources in the company said that this was probably because the Chinese suppliers are experts only in producing equipment for 600 MW units, where they are cheaper because of the standardised design.
ref:
http://sify.com/finance/fullstory.php?id=14682474
Sunday, April 20, 2008
Tata Power, Bhel to sign long-term sourcing deal
In one of the biggest public-private partnership initiative, Tata Power (TPL) will enter into an agreement with state-owned Bhel for sourcing equipment for all its future power projects. This would be the first time a private sector company placing a bulk order for a series of power projects with Bhel.
Speaking to FE, Ravi Kumar, chairman and managing director, Bhel, said a memorandum of understanding (MoU) to formalise the arrangement will be signed shortly between the two Companies.
Kumar said Bhel was also talking with Reliance Power for supplying equipment for its 4,000 mw ultra mega power project at Krishnapatnam in Andhra Pradesh. To begin with, Tata Power would source equipment for a capacity of around 5,000 mw from Bhel through the negotiated route.
The list of power projects under discussions includes the 2000-2400 mw Dehrand thermal power project in Maharashtra, the 1800 mw Maithon thermal project in West Bengal, the 540 mw Naraj Marthapur project in Orissa and the 100 mw Bhira hydro power project in Maharashtra, Kumar said.
He said Bhel is executing the 250 mw Trombay and 1050 mw Maithon power projects of Tata Power. For most of the mega capacity projects like the Dehrand and Maithon power projects, Bhel has offered its 600 mw thermal sets.
Commenting on the development, the minister of state for power Jairam Ramesh said, “I welcome such partnerships as Bhel is the domestic leader in the power equipment business and should be strengthened. A similar mega sized deal is also underway between Reliance Power and Bhel. A team from Reliance Power met me last week and desired to join hands with Bhel for the EPC contract for its Rs 17,000-crore Krishnapatnam project. Such deals will also help in cutting down cheap imports from China, which has affected the growth of the capital goods sector.”
Alongside, the Cabinet is soon expected to clear the proposal for awarding a huge bulk order of around 8000 mw of supercritical sets of NTPC with Bhel on a negotiated basis.
Ramesh said the government doesn’t favour putting Bhel under the adverse competition originating from imports of plant packages, and is taking a protective stand. A policy directive making domestic manufacturing compulsory for all foreign equipment suppliers will be issued shortly.
Source:
http://www.financialexpress.com/news/Tata-Power--Bhel-to-sign-long-term-sourcing-deal/299547/
Speaking to FE, Ravi Kumar, chairman and managing director, Bhel, said a memorandum of understanding (MoU) to formalise the arrangement will be signed shortly between the two Companies.
Kumar said Bhel was also talking with Reliance Power for supplying equipment for its 4,000 mw ultra mega power project at Krishnapatnam in Andhra Pradesh. To begin with, Tata Power would source equipment for a capacity of around 5,000 mw from Bhel through the negotiated route.
The list of power projects under discussions includes the 2000-2400 mw Dehrand thermal power project in Maharashtra, the 1800 mw Maithon thermal project in West Bengal, the 540 mw Naraj Marthapur project in Orissa and the 100 mw Bhira hydro power project in Maharashtra, Kumar said.
He said Bhel is executing the 250 mw Trombay and 1050 mw Maithon power projects of Tata Power. For most of the mega capacity projects like the Dehrand and Maithon power projects, Bhel has offered its 600 mw thermal sets.
Commenting on the development, the minister of state for power Jairam Ramesh said, “I welcome such partnerships as Bhel is the domestic leader in the power equipment business and should be strengthened. A similar mega sized deal is also underway between Reliance Power and Bhel. A team from Reliance Power met me last week and desired to join hands with Bhel for the EPC contract for its Rs 17,000-crore Krishnapatnam project. Such deals will also help in cutting down cheap imports from China, which has affected the growth of the capital goods sector.”
Alongside, the Cabinet is soon expected to clear the proposal for awarding a huge bulk order of around 8000 mw of supercritical sets of NTPC with Bhel on a negotiated basis.
Ramesh said the government doesn’t favour putting Bhel under the adverse competition originating from imports of plant packages, and is taking a protective stand. A policy directive making domestic manufacturing compulsory for all foreign equipment suppliers will be issued shortly.
Source:
http://www.financialexpress.com/news/Tata-Power--Bhel-to-sign-long-term-sourcing-deal/299547/
Saturday, April 19, 2008
Centre wants BHEL norms, local machines in power plants
The Centre will try to standardise power projects to ensure that only technologies proven in Indian conditions are used, Minister of State for Power and Commerce Jairam Ramesh said here today.
Hinting at a move against imports of entire plants, he said power projects with imported equipment are not proving viable. “We found that 20 per cent of the 78,000 mw capacity to be added during the 11th Plan period will have the main plant package imported from China. But the machinery from China already used in West Bengal’s Sagardighi and Durgapur has proved inefficient in operating with Indian coal, which has a high ash content,” he said.
The government-owned Bharat Heavy Electricals Ltd, which had a monopoly when imports were not allowed, has been unable to meet the demand for power plant equipment.
Last year, Union power minister Sushil Kumar Shinde had said Bhel had been asked to compete for new projects via open global tenders. This had opened the floodgates to Chinese manufacturers.
“BHEL has proved (itself) with 500 mw plant packages and we are insisting that the BHEL standard should be implemented in all Indian power projects,” Ramesh said.
He made clear that the government is not eager to put BHEL under the adverse competition.
While BHEL is increasing its equipment-making capacity from the current 10,000 mw to 15,000 mw by 2011, Larsen & Toubro is setting up a facility of 4000 mw capacity per annum at Hazira.
Alstom and Alsando are already negotiating with the government for boiler making units and the proposed joint venture of power utility NTPC Ltd and BHEL of 4000 mw capacity will be commissioned by 2012.
Ramesh said orders have already been placed for 71,000 mw, but given India’s long-term power demand projection, orders for 25,000-30,000 mw have to be placed every year. The new manufacturing units will be able to make timely delivery of these orders, he said.
Union power minister Sushil Kumar Shinde had earlier told The Indian Express that China has five or six companies meeting the annual capacity addition of nearly 60,000 mw and India needs to learn from the China experience and have more manufacturers to support its power programme.
source;
http://www.expressindia.com/latest-news/Centre-wants-BHEL-norms-local-machines-in-power-plants/298856/
Hinting at a move against imports of entire plants, he said power projects with imported equipment are not proving viable. “We found that 20 per cent of the 78,000 mw capacity to be added during the 11th Plan period will have the main plant package imported from China. But the machinery from China already used in West Bengal’s Sagardighi and Durgapur has proved inefficient in operating with Indian coal, which has a high ash content,” he said.
The government-owned Bharat Heavy Electricals Ltd, which had a monopoly when imports were not allowed, has been unable to meet the demand for power plant equipment.
Last year, Union power minister Sushil Kumar Shinde had said Bhel had been asked to compete for new projects via open global tenders. This had opened the floodgates to Chinese manufacturers.
“BHEL has proved (itself) with 500 mw plant packages and we are insisting that the BHEL standard should be implemented in all Indian power projects,” Ramesh said.
He made clear that the government is not eager to put BHEL under the adverse competition.
While BHEL is increasing its equipment-making capacity from the current 10,000 mw to 15,000 mw by 2011, Larsen & Toubro is setting up a facility of 4000 mw capacity per annum at Hazira.
Alstom and Alsando are already negotiating with the government for boiler making units and the proposed joint venture of power utility NTPC Ltd and BHEL of 4000 mw capacity will be commissioned by 2012.
Ramesh said orders have already been placed for 71,000 mw, but given India’s long-term power demand projection, orders for 25,000-30,000 mw have to be placed every year. The new manufacturing units will be able to make timely delivery of these orders, he said.
Union power minister Sushil Kumar Shinde had earlier told The Indian Express that China has five or six companies meeting the annual capacity addition of nearly 60,000 mw and India needs to learn from the China experience and have more manufacturers to support its power programme.
source;
http://www.expressindia.com/latest-news/Centre-wants-BHEL-norms-local-machines-in-power-plants/298856/
Thursday, April 17, 2008
Reverse Auctions at BHEL
BHEL has lot of good brains and many look forward to implement new technologies. The material procured runs into thousands of Crores of Rupees. And many innovative processes are used to reduce procurement cost as well as to use available inventory/resources.
BHEL has implemented many computerised systems and even implemented SAP in 2002/03
BHEL attempted Reverse Auctions way back in early 2000 ( 2004/05 -- I am not sure). It is a great way to apply pressure on suppliers to reduce the price online as they can see the status of their pricing. L1 ( lowest 1 ) or L5 ( Lowest 5) or so.
A good presentation is at
http://www.dgsnd.gov.in/Copy%20of%20REVERSE%20AUCTIONS-PPP.ppt
If you want more info, feel free to write to me at rameshb@vsnl.com
Ramesh
The Human Search Engine
All U Wanted
BHEL has implemented many computerised systems and even implemented SAP in 2002/03
BHEL attempted Reverse Auctions way back in early 2000 ( 2004/05 -- I am not sure). It is a great way to apply pressure on suppliers to reduce the price online as they can see the status of their pricing. L1 ( lowest 1 ) or L5 ( Lowest 5) or so.
A good presentation is at
http://www.dgsnd.gov.in/Copy%20of%20REVERSE%20AUCTIONS-PPP.ppt
If you want more info, feel free to write to me at rameshb@vsnl.com
Ramesh
The Human Search Engine
All U Wanted
Thursday, April 3, 2008
Bhel net rises 17%, plans greater role in nuclear segment
Spurred by a jump in orders, India’s largest power equipment maker Bharat Heavy Electricals Ltd (Bhel) on Thursday reported a 17% growth in net profit for the fiscal year 2007-08 compared with the previous year.
Its net profit was Rs2,815 crore compared with Rs2,415 crore a year ago. The company’s order book rose 41% to Rs50,265 crore and turnover was up 15% at Rs21,608 crore, its highest till date.
“There is a shortage of raw materials, problems in supply chain management and availability of skilled manpower. However, our projects in the 11th Plan period (2007-12) will be on time as we have taken advanced manufacturing action and ordered raw materials,” said K. Ravi Kumar, chairman and managing director.
However, power sector analysts say Bhel will not be able to sustain a growth trajectory in the long term because of increasing competition.
“Bhel will increasingly witness competition from overseas firms, particularly Chinese suppliers. When China’s domestic demands are met, these firms will start dumping in the Indian market as they will have an immense cost advantage,” said a New Delhi-based analyst, who did not want to be identified.
Bhel remains unfazed and proposes to introduce thermal power generator units with new capacities of 270MW, 525MW and 600MW to counter the Chinese threat.
“We are ready to take on international competition,” said Kumar.
He, however, admitted that since the yuan is undervalued, there will be pressure from Chinese companies such as Dongfang Electric Corp. Ltd, Shanghai Electric Power Co. Ltd and Harbin Power Equipment Co. Ltd.
“Currency fluctuation will hurt our margins to a certain extent. However, 40% of our contracts are covered for price fluctuations,” Kumar added.
To meet the increasing demand, Bhel plans to hire around 20,000 employees over the next five years that could even include lateral recruitment.
In another development, Bhel is in talks with Reliance Power Ltd (RPL) of the Reliance-Anil Dhirubhai Ambani Group for supplying equipment to the two 4,000MW projects of RPL at Sasan in Madhya Pradesh and Krishnapatnam in Andhra Pradesh.
The company will also start making, in a venture with Nuclear Power Corp. of India Ltd (NPCIL), nuclear-powered turbines and generators with capacities of 1,000MW and 1,600MW. It may also take up engineering, procurement and construction activities in the nuclear power sector.
“We, along with NPCIL, may also partner with an overseas technology provider for the nuclear power business. We are open to even giving them equity.”
Bhel has an annual manufacturing capacity of making power equipment that have a total capacity of 10,000MW, which the company plans to raise to 15,000MW a year by December 2009.
source:
http://www.livemint.com/2008/04/04004721/Bhel-net-rises-17-plans-grea.html
Ramesh
Human Search Engine
http://www.alluwanted.com
Its net profit was Rs2,815 crore compared with Rs2,415 crore a year ago. The company’s order book rose 41% to Rs50,265 crore and turnover was up 15% at Rs21,608 crore, its highest till date.
“There is a shortage of raw materials, problems in supply chain management and availability of skilled manpower. However, our projects in the 11th Plan period (2007-12) will be on time as we have taken advanced manufacturing action and ordered raw materials,” said K. Ravi Kumar, chairman and managing director.
However, power sector analysts say Bhel will not be able to sustain a growth trajectory in the long term because of increasing competition.
“Bhel will increasingly witness competition from overseas firms, particularly Chinese suppliers. When China’s domestic demands are met, these firms will start dumping in the Indian market as they will have an immense cost advantage,” said a New Delhi-based analyst, who did not want to be identified.
Bhel remains unfazed and proposes to introduce thermal power generator units with new capacities of 270MW, 525MW and 600MW to counter the Chinese threat.
“We are ready to take on international competition,” said Kumar.
He, however, admitted that since the yuan is undervalued, there will be pressure from Chinese companies such as Dongfang Electric Corp. Ltd, Shanghai Electric Power Co. Ltd and Harbin Power Equipment Co. Ltd.
“Currency fluctuation will hurt our margins to a certain extent. However, 40% of our contracts are covered for price fluctuations,” Kumar added.
To meet the increasing demand, Bhel plans to hire around 20,000 employees over the next five years that could even include lateral recruitment.
In another development, Bhel is in talks with Reliance Power Ltd (RPL) of the Reliance-Anil Dhirubhai Ambani Group for supplying equipment to the two 4,000MW projects of RPL at Sasan in Madhya Pradesh and Krishnapatnam in Andhra Pradesh.
The company will also start making, in a venture with Nuclear Power Corp. of India Ltd (NPCIL), nuclear-powered turbines and generators with capacities of 1,000MW and 1,600MW. It may also take up engineering, procurement and construction activities in the nuclear power sector.
“We, along with NPCIL, may also partner with an overseas technology provider for the nuclear power business. We are open to even giving them equity.”
Bhel has an annual manufacturing capacity of making power equipment that have a total capacity of 10,000MW, which the company plans to raise to 15,000MW a year by December 2009.
source:
http://www.livemint.com/2008/04/04004721/Bhel-net-rises-17-plans-grea.html
Ramesh
Human Search Engine
http://www.alluwanted.com
Friday, March 28, 2008
Don't see slowdown in capital goods industry: BHEL
CS Varma, CFO, BHEL said that their current order book stands at Rs 81,856 crore and that they have a total capex of Rs 4200 crore over the next two years.
Speaking to CNBC-TV18, Varma said he sees no slowdown in the capital goods industry. According to him, they are the only bidders for NTPC’s bar extension programme and they may bag the order soon. He added that they have bagged orders to the tune of 38385 megawatts.
Excerpts of CNBC-TV18’s exclusive interview with CS Varma:
Q: The last IIP numbers that came out said that the capital goods industry has grown at just 2.1%, it was something that was sharply lower than it’s comparative figures. In your assessment, are you sensing a slowdown in the industry and order intake at this point of time or do you think that this was just one of, as a blip?
A: Not at all, in fact, for the purpose of proper comparison we have to take the figures for the year as a whole and not some periodic figure. So a proper comparison will be when we take the figures of the year as a whole. I have given you the brief synopsis of how BHEL is booming and it is playing a major part in the power sector. Power sector is a very important sector in the total infrastructure sector in the Indian economy.
Q: How does this translate into what your order book is currently standing at and how do you think that this would grow, going into FY09?
A: As on date, our order book position in financial terms is at Rs 81,856 crore. The power sector accounts for a majority of the orders which is about Rs 70,000 crore, the industry sector is about Rs 8300 crore and international operation is about Rs 4200 crore. I have already mentioned that the capacity addition programme of the Government of India, in the 11th 5-year Plan is 79725-megawatt. Out of this, the bulk of the orders have already been placed. Except for 9800-megawatts, all the order is complete and BHEL has secured orders in physical terms of 38,385-megawatt which constitutes about 55% of the total orders placed in power sector.
Q: You mentioned the industrial segment, spares and services, R&D, international operations, will all those make an increased contribution to your revenues for the year ahead before the 12th year plan orders start kicking in?
A: We are already having a strategic plan for the terminal year which is 2011-2012 whereby we have envisaged the role of power sector, industry sector, international operations. Power sector is booming, at the same time our industry sector is also keeping pace with the growth of industry in India.
Q: How much would its contribution to your revenues go up by?
A: About 25% is being contributed by the industry sector.
Q: Specifically in terms of rupee-crore, between now and 2009-2010, what is the outlay that BHEL has in terms of capital spending?
A: About our capital investment programme, our capex is Rs 4,200 crore. As far as the rupee movement is concerned, we are having a natural hedge. Our imports and exports are more or less equal and as a matter of strategy, we have taken a decision to put all our inflows in the EFC account. Now the government of India has permitted interest payment, in a limited way, in the inflows being put in this account. Thus there is a natural hedge but we are also having a foreign exchange policy approved by the board of directors of BHEL. So as and when there is a benchmark limit which is reached, we take option cover including, the vanilla cover.
Q: We believe that you have emerged as a lowest cost bidder for NTPC and SEB orders on the super critical units and you believe to be in talks with two state governments as well to pick up equity stakes in power plants based on the super critical technology. What is the kind of investment that is likely there and when is it likely to actually take full shape?
A: Our capex programme for the eleventh 5-year plan is Rs 4,200 crore and this takes into account our investment in the super critical technology also. Now we are bidding and we are likely to get the orders.
We are already L1, we are the only bidder in case of the bar extension project of NTPC and I think the order is likely to be placed very shortly. We have also bid in the Apgenco Krishnapatanam. Earlier we were the loan bidders, but then since we were the loan bidders, the bid was cancelled. Now they had again invited bids where we have bid along with one more bidder L&T.
The evaluation is under process and I think BHEL will come out as a winner. This order, if it is coming to BHEL, will come in the first quarter of the next financial year. Besides we are also going through the JV route, we have formed a JV in association with the TNEB.
Q: One very big concern that analysts have with regards to your company is the concern over super critical technology and the kind of contracts that you have tied up to that effect. Is that a concern at BHEL?
A: Not at all, in fact, all our future technologies are super critical only. As per the estimates given by the Planning Commission, a 10% capacity addition programme in the 11th 5-year plan will be based upon super critical. This 10% will go to 70% in the 12th 5-year plan. We are fully geared up to face this challenge.
ref:
http://www.moneycontrol.com/india/news/market-outlook/dont-see-slowdowncapital-goods-industry-bhel/15/22/331740
Speaking to CNBC-TV18, Varma said he sees no slowdown in the capital goods industry. According to him, they are the only bidders for NTPC’s bar extension programme and they may bag the order soon. He added that they have bagged orders to the tune of 38385 megawatts.
Excerpts of CNBC-TV18’s exclusive interview with CS Varma:
Q: The last IIP numbers that came out said that the capital goods industry has grown at just 2.1%, it was something that was sharply lower than it’s comparative figures. In your assessment, are you sensing a slowdown in the industry and order intake at this point of time or do you think that this was just one of, as a blip?
A: Not at all, in fact, for the purpose of proper comparison we have to take the figures for the year as a whole and not some periodic figure. So a proper comparison will be when we take the figures of the year as a whole. I have given you the brief synopsis of how BHEL is booming and it is playing a major part in the power sector. Power sector is a very important sector in the total infrastructure sector in the Indian economy.
Q: How does this translate into what your order book is currently standing at and how do you think that this would grow, going into FY09?
A: As on date, our order book position in financial terms is at Rs 81,856 crore. The power sector accounts for a majority of the orders which is about Rs 70,000 crore, the industry sector is about Rs 8300 crore and international operation is about Rs 4200 crore. I have already mentioned that the capacity addition programme of the Government of India, in the 11th 5-year Plan is 79725-megawatt. Out of this, the bulk of the orders have already been placed. Except for 9800-megawatts, all the order is complete and BHEL has secured orders in physical terms of 38,385-megawatt which constitutes about 55% of the total orders placed in power sector.
Q: You mentioned the industrial segment, spares and services, R&D, international operations, will all those make an increased contribution to your revenues for the year ahead before the 12th year plan orders start kicking in?
A: We are already having a strategic plan for the terminal year which is 2011-2012 whereby we have envisaged the role of power sector, industry sector, international operations. Power sector is booming, at the same time our industry sector is also keeping pace with the growth of industry in India.
Q: How much would its contribution to your revenues go up by?
A: About 25% is being contributed by the industry sector.
Q: Specifically in terms of rupee-crore, between now and 2009-2010, what is the outlay that BHEL has in terms of capital spending?
A: About our capital investment programme, our capex is Rs 4,200 crore. As far as the rupee movement is concerned, we are having a natural hedge. Our imports and exports are more or less equal and as a matter of strategy, we have taken a decision to put all our inflows in the EFC account. Now the government of India has permitted interest payment, in a limited way, in the inflows being put in this account. Thus there is a natural hedge but we are also having a foreign exchange policy approved by the board of directors of BHEL. So as and when there is a benchmark limit which is reached, we take option cover including, the vanilla cover.
Q: We believe that you have emerged as a lowest cost bidder for NTPC and SEB orders on the super critical units and you believe to be in talks with two state governments as well to pick up equity stakes in power plants based on the super critical technology. What is the kind of investment that is likely there and when is it likely to actually take full shape?
A: Our capex programme for the eleventh 5-year plan is Rs 4,200 crore and this takes into account our investment in the super critical technology also. Now we are bidding and we are likely to get the orders.
We are already L1, we are the only bidder in case of the bar extension project of NTPC and I think the order is likely to be placed very shortly. We have also bid in the Apgenco Krishnapatanam. Earlier we were the loan bidders, but then since we were the loan bidders, the bid was cancelled. Now they had again invited bids where we have bid along with one more bidder L&T.
The evaluation is under process and I think BHEL will come out as a winner. This order, if it is coming to BHEL, will come in the first quarter of the next financial year. Besides we are also going through the JV route, we have formed a JV in association with the TNEB.
Q: One very big concern that analysts have with regards to your company is the concern over super critical technology and the kind of contracts that you have tied up to that effect. Is that a concern at BHEL?
A: Not at all, in fact, all our future technologies are super critical only. As per the estimates given by the Planning Commission, a 10% capacity addition programme in the 11th 5-year plan will be based upon super critical. This 10% will go to 70% in the 12th 5-year plan. We are fully geared up to face this challenge.
ref:
http://www.moneycontrol.com/india/news/market-outlook/dont-see-slowdowncapital-goods-industry-bhel/15/22/331740
Thursday, March 27, 2008
BHEL: Powerhouse
If the recommendations of the Sixth Pay Commission are fully implemented, there would be an incremental burden on the exchequer of Rs 7,975 crore each year. The panel is set up every 10 years to review the emoluments and pay of Central government employees.
Following the development, most Central PSUs will feel the blow of rising staff costs in their financials to some extent. Bharat Heavy Electricals (Bhel), India's largest power equipment maker, is expected to see a decline of 50 basis points in its operating profit margins for every 5% rise in wage costs, analyst Vinod Chari of Credit Suisse Group said in a note to clients on Wednesday.
Chari cut Bhel's share price target by 13% in the next 12 months to Rs 2,714 and has cut the earnings per share estimates for the year ending March 2010 by 8%, on anticipation that wages may climb 40% from 30% expected earlier.
Another concern for Bhel lately has been the dumping (as the currency is undervalued) by Chinese companies. The price difference is said to be up to 20%.
However, Bhel maintains that its equipment are relatively better than those of rivals and that the plant load factor of its projects is 90% as against 60% in case of Chinese equipment.
While the Sixth Pay Commission brings with itself some form of margin pressure for Bhel, the good part is that the company is experiencing robust order inflows. Bhel's new products, new technology and new captive power clients or independent power producers are driving order inflows.
Bhel is currently sitting on an order book of over Rs 82,000 crore, which reflects a 49% YoY growth led, by order intake of Rs 11,000 in Q4FY08 on new order flows. Revenues for the quarter increased 14% YoY to Rs 4,964.14 crore, while net profit increased by 15.6% to Rs 771.9 crore.
Bhel is expected to perform well in future, given its robust order book, access to super critical orders and efforts to improve competitiveness.
The stock has outperformed the broader Sensex and appreciated by 73.4% against the Sensex's increase of 22.5% in the past one year. At Rs 1,954.95, the stock trades at 22.4 and 18.03 times its estimated earnings for 2009 and 2010, respectively. It is a good pick in its space.
Under license from www.3dsyndication.com
ref:
http://sify.com/finance/fullstory.php?id=14630977
Following the development, most Central PSUs will feel the blow of rising staff costs in their financials to some extent. Bharat Heavy Electricals (Bhel), India's largest power equipment maker, is expected to see a decline of 50 basis points in its operating profit margins for every 5% rise in wage costs, analyst Vinod Chari of Credit Suisse Group said in a note to clients on Wednesday.
Chari cut Bhel's share price target by 13% in the next 12 months to Rs 2,714 and has cut the earnings per share estimates for the year ending March 2010 by 8%, on anticipation that wages may climb 40% from 30% expected earlier.
Another concern for Bhel lately has been the dumping (as the currency is undervalued) by Chinese companies. The price difference is said to be up to 20%.
However, Bhel maintains that its equipment are relatively better than those of rivals and that the plant load factor of its projects is 90% as against 60% in case of Chinese equipment.
While the Sixth Pay Commission brings with itself some form of margin pressure for Bhel, the good part is that the company is experiencing robust order inflows. Bhel's new products, new technology and new captive power clients or independent power producers are driving order inflows.
Bhel is currently sitting on an order book of over Rs 82,000 crore, which reflects a 49% YoY growth led, by order intake of Rs 11,000 in Q4FY08 on new order flows. Revenues for the quarter increased 14% YoY to Rs 4,964.14 crore, while net profit increased by 15.6% to Rs 771.9 crore.
Bhel is expected to perform well in future, given its robust order book, access to super critical orders and efforts to improve competitiveness.
The stock has outperformed the broader Sensex and appreciated by 73.4% against the Sensex's increase of 22.5% in the past one year. At Rs 1,954.95, the stock trades at 22.4 and 18.03 times its estimated earnings for 2009 and 2010, respectively. It is a good pick in its space.
Under license from www.3dsyndication.com
ref:
http://sify.com/finance/fullstory.php?id=14630977
Monday, March 24, 2008
Bhel plans capacity expansion in Trichy
Chennai, March 23 Bharat Heavy Electricals Limited (Bhel) at Tiruchirappalli in Tamil Nadu has embarked on a major capacity augmentation scheme. It has invested Rs 190 crore on equipment to produce 10,000 mw of power capacity equivalent per year and will be investing Rs 732 crore to further enhance the capacity to15,000 mw.
The initiatives are in line with the Central Electricity Authority’s capacity addition target of 78,577 mw for the Eleventh Plan, the company said here. Bhel Tiruchirappalli, which has achieved a record turnover of Rs 4,607 crore during fiscal 2006-07 with an all-time high profit before tax of Rs 872 crore, has now spruced up its construction activity to complete the second phase of its capacity augmentation scheme at an investment of
Rs 732 crore.
The second phase of expansion will be completed by March 2009, said a senior official of the company. The first phase was completed within a very short period at an estimated cost of Rs 190 crore, the official added.
According to the official, Bhel is setting up facilities to make 800 mw/1,000 mw super critical boilers at its Trichy plant.
The on-going phase-II will now focus on raising the overall installed capacity through the introduction of 75 types of high productive machines, the official said.
The total covered shop floor area, with associated office buildings, machinery, material handing, testing and support facilities added in the two phases will be around 1.25 million sq ft (around 1,12,000 sq m), the official added.
Reported at: http://www.financialexpress.com/news/Bhel-plans-capacity-expansion-in-Trichy/287669/
The initiatives are in line with the Central Electricity Authority’s capacity addition target of 78,577 mw for the Eleventh Plan, the company said here. Bhel Tiruchirappalli, which has achieved a record turnover of Rs 4,607 crore during fiscal 2006-07 with an all-time high profit before tax of Rs 872 crore, has now spruced up its construction activity to complete the second phase of its capacity augmentation scheme at an investment of
Rs 732 crore.
The second phase of expansion will be completed by March 2009, said a senior official of the company. The first phase was completed within a very short period at an estimated cost of Rs 190 crore, the official added.
According to the official, Bhel is setting up facilities to make 800 mw/1,000 mw super critical boilers at its Trichy plant.
The on-going phase-II will now focus on raising the overall installed capacity through the introduction of 75 types of high productive machines, the official said.
The total covered shop floor area, with associated office buildings, machinery, material handing, testing and support facilities added in the two phases will be around 1.25 million sq ft (around 1,12,000 sq m), the official added.
Reported at: http://www.financialexpress.com/news/Bhel-plans-capacity-expansion-in-Trichy/287669/
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