Bhel order-book position dwindles as power sector slows down

Country's largest power gear maker Bhel is struggling to keep the order-book strong and may even find it difficult to keep it rolling in the next couple of years as new private power projects face a slowdown.

The state-owned company's orders from the power sector started witnessing a downward trend since the beginning of the last financial year (2013-14).

It bagged 5 orders last fiscal and the same number of orders in the current fiscal for supplying power equipment.

According to experts, this is mainly due to slowdown in the power sector and the situation is likely to remain grim during the next couple of years.

"There a complete slowdown in private power project initiation, as the sector is currently facing overcapacity and ready projects waiting for PPA and fuel. As a result order flow for capital good company depending on electricity generation project will slow down," said Debashish Mishra, Senior Director, Consulting, Deloitte India.

He said this situation may continue for 18-24 months.

Bhel won order for setting up a 120 MW Hydro Electric Project in Uttarakhand on March 31, 2014. The Rs 125 crore order for setting up of Hydro Generating sets and associated Electro-Mechanical works has been placed by Uttarakhand Jal Vidyut Nigam Ltd (UJVNL).

In July, it bagged a Rs 68 crore order to set up 10 MW Solar Power Plant at Shivanasamudram for Karnataka Power Corporation Limited (KPCL).

In May, the company signed an initial agreement with PT Star Vyobros, Indonesia for setting up a 200 MW coal-fired power plant in the Sulawesi region in Indonesia.

Bhel signed a preliminary pact for setting up Renewable Energy Projects in Yemen in April, 2014.