BHEL net up on non-power projects

The PSU had delivered a Rs 1,085 cr loss in the same quarter a year ago

State-owned EPC (engineering, procurement & construction) major BHEL on Tuesday reported a Rs 93.54-crore profit for the quarter ended December 31, against a loss of Rs 1,084.96 crore in the corresponding period a year ago. This was the third quarter in a row when the company reported profit. Projects from non-power sectors such as the railways and defence helped BHEL keep up the good show.
 
Total income increased 17 per cent to Rs 6,461.22 crore in the December quarter. BHEL, in a statement said, in the first nine months of the financial year, the company saw its turnover grow 19 per cent to Rs 18,966 crore. For nine months to December 2016, BHEL posted a net profit of Rs 280 crore against a loss of Rs 1,215 crore in the same period of previous financial year.
 
Shares of BHEL soared 4.65 per cent to trade at Rs 150.70 after the announcement of the financial results.
 
“This has been made possible by a slew of strategic initiatives and cost optimisation measures put in place by the management. Having achieved the immediate target of regaining growth, the company is now enhancing its focus on maintaining its leadership status in the power sector, while diversifying in the non-thermal power segment,” BHEL Chairman and Managing Director Atul Sobti said.
 
BHEL suffered negative growth for 14 quarters after finally turning around in Q2FY17. Its profits had plunged 82 per cent since Q1FY16, owing mostly to decrease in sales.
 
The company has an order book of Rs 98,400 crore at the end of Q3FY17. It is now looking to diversify in new sectors — mostly industrial infrastructure, railways and defence. “As part of this, focus is on creating new verticals within the company to capitalise on the massive infrastructure spending by the government, with a special focus on Indian Railways, defence and other industrial products to drive the next wave of growth,” Sobti said. BHEL’s board has approved payment of interim dividend at the rate of 40 per cent (Rs 0.80 per share) on paid-up share capital for 2016-17 and interim dividend shall be paid (or dispatched) on February 22.