12th Plan order flows to be strong in FY10: BHEL

Q&A: K Ravi Kumar, Chairman & MD, BHEL
Jitendra Kumar Gupta / New Delhi March 23, 2009, 0:40 IST

A dominant player in the power equipment business, Bharat Heavy Electricals (BHEL) has been a major beneficiary of the growing investments in the power sector, which is clearly reflecting in its huge order book. However, off late, there have been concerns building up with regards the slowdown in new order inflow and rising competition.

Also, margins have come down in the third quarter, on account of higher raw material prices and wage provisions, which are seen impacting earnings in 2008-09. In light of these events, Jitendra Kumar Gupta spoke to K Ravi Kumar, chairman and managing director, BHEL about his views on the same and the company’s future strategy.


Will the planned capacity addition of 78,000 mw for the 11th plan be achieved?
As per the planning commission report it will be about 60,000 mw and, as far as our orders are concerned we have about 40,000 mw.

What is the current order book and the average execution time? And, what sales growth is expected over the next two years?
Our current order book is Rs 1,25,000 crore with average execution cycle of 36 months.

In 2008-09, we are expecting sales growth of 25-30 per cent.

Out of the total orders, power accounts for about 80 per cent and, rest comes from the industrial sector where we want to enter into private sector transmission and transportation business in a big way. Going forward, the share of industrial sector will rise to 30 per cent. So far, demand has been good but, next year we will have to wait and see.



Complete article at :

http://www.business-standard.com/india/news/12th-plan-order-flows-to-be-strong-in-fy10-bhel/352549/