BHEL sees flat sales growth in FY13
Bharat Heavy Electricals , India's biggest power equipment maker, expects flat growth in sales in the new fiscal year that began on April 1 because of uncertainties plaguing power producers, company officials said.
Shortages of coal and gas supplies, delays in environmental approvals for power and mining projects and drying up of funding have severely dented the sector in the country, which faces huge shortfall in electricity generation.
State-run BHEL is targeting gross sales of 500 billion rupees in 2012/13, which is almost flat compared with the previous year because of the uncertainties in the sector, Finance Director P.K. Bajpai said.
The company's order book stood at 1.35 trillion rupees at the end of March, and it is targeting to get new orders worth 600 billion rupees this year compared with a 64 percent drop in 2011/12 to 220.9 billion rupees.
Prime Minister Manmohan Singh is pushing state-backed Coal India (COAL.NS), the country's biggest coal producer, to boost output and help the power plants that are running below capacity.
"The logjam seems to be ending, though problems will not vanish in a day," BHEL Chairman B. Prasada Rao told reporters. "I see things improving."
BHEL reported a 14 percent rise in 2011/12 net profit to 68.7 billion rupees on turnover of 493.01 billion rupees, according to provisional results.
"Order inflows are lower-than-estimated but profit margins are higher for FY12. I expect the street to cut its revenue estimates for FY13 and FY14 owing to the sluggish outlook," said a Mumbai-based analyst, rated by Starmine Professional as a four star analyst on the basis of accuracy of his recommendations.
BHEL's Bajpai said the government has decided to put on hold plans to sell a stake and the company withdrew initial papers filed with the capital market regulator for the offering.
The stake sale, which was approved by the cabinet in 2011, was expected to raise about $1 billion.
Shares in the company, valued by the market at $12.5 billion, closed up 1.3 percent. The stock has gained 10.6 percent in 2012, compared with about 14 percent rise in the main stock index.
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