BHEL Q1 misses estimates, profit up 4% at Rs 81 cr; EBITDA loss at Rs 88 cr

Bharat Heavy Electricals (BHEL) said profit for April-June quarter stood at Rs 81 crore, higher by 3.9 percent over Rs 77.7 crore reported in year-ago quarter. Profitability was largely hit by higher finance cost and other expenses. Deferred tax of Rs 52.37 crore (against Rs 12.13 crore YoY) helped the company to report growth of 3.9 percent but excluding that numbers were far lower than analysts' expectations. At operational level, the company posted EBITDA loss (earnings before interest, tax, depreciation and amortisation) of Rs 88.3 crore against profit of Rs 71 crore on year-on-year basis. Overall numbers missed expectations. Profit was expected at Rs 60 crore and operating income at Rs 110 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18. Revenue during the quarter declined 1.5 percent to Rs 5,732 crore compared with Rs 5,821 crore in corresponding quarter of last fiscal, hit by industry business (down 8 percent YoY) and flat growth in power business. Other expenses increased sharply 59.6 percent to Rs 889.7 crore on year-on-year basis. ref: http://www.moneycontrol.com/news/business/earnings-business/bhel-q1-misses-estimates-profit-up-4-at-rs-81-cr-ebitda-loss-at-rs-88-cr-2356035.html

BHEL ancillaries going bankrupt

Very many ancillary units of Bharat Heavy Electricals Limited (BHEL) are literally in the red; actually, at the receiving end of banks. As many as 200 of the over 400 units have reportedly closed down operations over the last few years, reflecting the scaled-down orders bagged by BHEL. And, over 100 units are stated to be on the verge of closure at the mercy of banks in a helpless situation even as immovable properties the ancillaries had pledged as collatoral security are being confiscated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act “The situation is really bad for the Small and Medium Enterprises units that used to provide 20,000 direct jobs and as many indirect jobs when the conditions was ideal. Rather than confiscating properties that would spell doom for the SME sector in Tiruchi that had flourished for decades, the Central Government must intervene with offers of moratorium on the loans, and fresh capital infusion to make the most of the strength of Tiruchi as a fabrication hub and sustain the operations of the ancillary units by diverting orders from defence equipment manufacturers,” Rajappa Rajkumar, Chairman of BRAMAS (BHELSIA Raw Materials) Industrial Service Association, said, adding that ancillary units have proposed to start 'Save Tiruchi SMEs' programme. The focus of the initiative will be to prevail upon the government to accord priority for saving existing SMEs over creating new ones, Mr. Rajkumar said. The BHEL Small Industries Association is pinning hopes on the orders bagged by BHEL in recent months to attain at least 70 per cent of the targetted 3.2 lakh tonnes for this fiscal. There has been a perceptible rise in volumes in the final quarter of last fiscal and the first quarter now, S. Ashok Sundaresan, BHELSIA president, said. The situation was indeed bad one year back when the units used to function for one month and remain idle for two months. But now, the capacity utilisation wagetting better, Mr. Ashok said. ref: http://www.thehindu.com/news/cities/Tiruchirapalli/bhel/article19337106.ece

BHEL partners Kawasaki to manufacture coaches for metros

Expanding its exposure to the growing urban transportation sector, state-owned Bharat Heavy Electricals Ltd (BHEL), has entered into a technology collaboration agreement with Kawasaki Heavy Industries, Ltd. (KHI), Japan for the manufacture of stainless steel coaches for metros. The Technology Collaboration Agreement was signed by Amitabh Mathur, Director (IS&P), BHEL and Makoto Ogawara, Senior Vice President, KHI and covers establishing a state-of-the-art design, engineering and manufacturing facilities at BHEL, India using Japanese technology, a company statement said. The pact will also entitle BHEL for all technology advances and upgrades. BHEL has been supplying the Indian Railways both electric and diesel locomotives, EMUs, and propulsion system sets and drives for the same. Kolkata Metro, the first metro project in India, is equipped with BHEL made propulsion system. KHI is a manufacturer of heavy equipment and its rolling stock company has supplied EMU trainsets to various countries like the US, Singapore, Taiwan and Hong Kong, alongside Japan, the statement said. KHI, is also the manufacturer and supplier of the Shinkansen High Speed Bullet Trains, proposed to be introduced in India on the Mumbai-Ahmedabad High Speed Rail Corridor. The pact will enable BHEL to produce stainless steel coaches indigenously, it added. ref; http://indianexpress.com/article/business/companies/bhel-partners-kawasaki-to-manufacture-coaches-for-metros-4728471/

BHEL bags 15 MW solar photovoltaic plant order in Gujarat

Bharat Heavy Electricals LtdBSE 0.60 % (BHELBSE 0.60 %) has secured an order for setting up a 15 MW solar photovoltaic power plant on EPC basis in Gujarat. Gujarat Alkalies and Chemical Limited placed the order for setting up plant at Gujarat Solar Park in Charanka, the power equipment maker said in a statement. This will be BHEL's first ground-mounted Solar PV project in Gujarat. The company is presently executing over 180 MW of ground-mounted and rooftop Solar PV projects across the country, it said. BHEL has been contributing to the national initiatives for developing and promoting renewable energy-based products on a sustained basis since the past three decades, the company said. It has enhanced its state-of-the-art manufacturing lines of solar cells to 105 MW and solar modules to 226 MW per annum. In addition, space-grade solar panels using high efficiency cells and space-grade battery panels are manufactured at its Electronic Systems Division, Bengaluru. It is one of the few companies in India whose solar business is backed by a dedicated R&D team. ref: http://economictimes.indiatimes.com/industry/energy/power/bhel-bags-15-mw-solar-photovoltaic-plant-order-in-gujarat/articleshow/59336277.cms

BHEL slips 3% as JP Morgan cuts target price, full year earnings estimates

BHEL shares declined more than 3 percent intraday Friday after JP Morgan slashed 12-month target price to Rs 128 (from Rs 128 earlier) despite stock's underperformance to Sensex. The research house cut its earnings estimates for FY18 / FY19 to 6 percent / 10 percent as it feels the replacement of old thermal plants is not as big a catalyst as it is made out to be. The state-run power equipment maker has underperformed Sensex by around 25 percent over the last three months. FY17 order inflows/backlog were down 46/5 percent and March quarter topline growth (negative 2.2 percent) disappointed. JP Morgan feels staff costs are likely to increase around 20 percent in FY18 following the wage settlement exercise, solar tariffs appear to have become more cost competitive relative to thermal, the capex opportunity by thermal plays for emissions reduction has seen pushback, and BHEL's diversification efforts have not produced very significant results over the last few years. more at: http://www.moneycontrol.com/news/business/stocks-business/bhel-slips-3-as-jp-morgan-cuts-target-price-full-year-earnings-estimates-2311145.html

Kerala government allows BHEL to exit from joint venture with EML

The Kerala government on Monday allowed Bharat Heavy Electricals Limited (BHEL) to exit the joint venture (JV) with State-run Electrical Machines Ltd. at Kasaragod. A decision in this regard was taken at a high-level meeting chaired by Chief Minister Pinarayi Vijayan. BHEL-EML was incorporated in 2011, by acquiring the Kasaragod unit of KEL, a State PSU, as a joint venture with Government of Kerala. BHEL had 51% equity in the JV and the Kerala government holding 49%. However, BHEL was unwilling to invest any amount as per the agreement, and also wanted to exit the JV, a government release said. The company with 174 employees was running on loss. In these circumstances, the Chief Minister called a high-level meeting in which Industries Minister A C Moideen, Member of Parliament P Karunakaran, Chief Secretary Nalini Netto and BEHL-Electrical Machines Ltd Managing Director S Basu, among others participated. BHEL-Electrical Machines Ltd, Kasaragod, is a Central Public Sector Enterprise (CPSE) and a subsidiary of BHEL, a Maharatna company. ref: http://www.livemint.com/Companies/1O7RN00ZAouYzOsuHmCoxN/Kerala-government-allows-BHEL-to-exit-from-joint-venture-wit.html

BHEL to pay 79% dividend for fiscal 2016-17

Bharat Heavy Electricals Ltd has proposed an equity dividend of 79% for fiscal 2016-17. In fiscal, 2016-17 BHEL has achieved double-digit growth in its topline and bounced back into profit. During the year, BHEL recorded a turnover of Rs 28,840 crore up 11% over the previous year- after reversing the trend of negative topline growth prevailing for the last 3 years. The company has also returned to profitability with a Profit before tax of Rs 628 crore compared to a loss of Rs 1164 crore in the last fiscal. PAT stood at Rs 496 crore, against a net loss of Rs 710 crore in the previous year. The stock traded in a positive territory at Rs 140.65 per share on BSE at 12:22 IST on Monday’s trade attracting a total traded quantity of 2.72 lakh. ref: http://www.indiainfoline.com/article/news-top-story/bhel-dividend-bhel-to-pay-79-dividend-for-fiscal-2016-17-117060500069_1.html