Friday, April 4, 2008

BHEL Q4 Profit Down 7.4%

New Delhi: BHEL on April 3 announced its fourth quarter result which is worst quarterly result in the last six years. BHEL''s Q4 profit declined 7.4 per cent to Rs 1,065 crore from Rs 1,150 crore though sales rose 33 per cent to Rs 9,240 crore from Rs 6,919 crore.

The order book position is at Rs 85,000 crore and BHEL expects to execute orders worth Rs 50,000 crore over next two years. BHEL''s margins are squeezed by higher provisioning for wage hikes to take the 6th pay panel proposals into account. The company plans to spend Rs 4,200 crore during 11th plan and aims to add another 18,000 - 20,000 employees to its current work force.

It says that it is in talks with Reliance Power to supply equipment for 4,000 MW projects. The company is in discussion with four State governments and Nuclear Power Corporation for joint ventures. It''s also in talks with Delhi Metro to supply coaches and its eyeing locomotive orders from Railways.

Meanwhile, BHEL stock price shed over 15 per cent in the last three trading sessions.
Analysts have some major concerns over shortage of workers and capacity as this made BHEL to delay execute some of its orders. Now, BHEL plans to pass on rise in input costs to its customers for 50 per cent of contracts to protect margins.

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