With bleak thermal power prospects, BHEL faces more pain in long run

By Livemint

An increasing preference for renewable energy amid high exposure to thermal power has become a major cause of the consistently disappointing earnings of power plant equipment supplier Bharat Heavy Electricals Ltd.

BHEL posted a standalone net loss of ₹556 crore in the September quarter, against a profit of ₹118 crore for the same period last year. The loss was worse than Bloomberg’s consensus estimate of ₹239.80 crore. Revenues were lower than expected as well, declining by around 40% year-on-year (y-o-y) to ₹3,695 crore in Q2FY21.

Order inflows halved y-o-y to ₹3,720 crore and the order book was flat at ₹1.1 trillion. Total receivables saw a marginal decline annually and sequentially, but remained elevated at ₹34,900 crore in Q2.

State-owned companies accounted for 48% of the total receivables, the management said. It was followed by the Centre (33%), private players (12%) and exports (7%), it added.

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