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Informist, Monday, Oct. 28, 2024

 

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--BHEL Jul-Sept net profit INR 966.7 mln
--BHEL Jul-Sept revenue INR 65.84 bln vs INR 51.25 bln year ago
--BHEL Apr-Sept net loss INR 1.16 bln vs INR 2.71 bln loss year ago
--BHEL Apr-Sept revenue INR 120.69 bln vs INR 101.29 bln year ago

 

By Avishek Rakshit

 

KOLKATA – Rising revenues from the energy business vertical and a strong order book led Bharat Heavy Electricals Ltd. to report a profit after tax of INR 966.7 million during Jul-Sept and take the Street by surprise, which had earlier predicted the state-owned company to remain in the red. The company’s revenue outpaced the outgo on costs, which helped it to report a profit for the first time after losses in the past five quarters.

 

Bharat Heavy Electricals reported a revenue of INR 65.8 billion, which grew by 28.5% on year, mainly led by the energy business segment. The revenue growth was also far more than what sector analysts had projected. Revenues from the power vertical soared by 23.5% on year to INR 50.3 billion. The company reported a loss after tax of INR 583 million on revenues of INR 51.3 billion in the year-ago period.

 

The Street, which had factored in fresh orders for the company worth INR 305 billion during Jul-Sept, expected it to report a loss after tax of INR 1.7 billion, and revenues of INR 59.8 billion. Last month, Bharat Heavy Electricals won a tender from energy major NTPC Ltd to engineer, procure, and construct a 800 MW supercritical thermal power plant for its existing project in Sipat in Chhattisgarh. In August, it bagged an order worth INR 110 billion from an Adani Power Ltd. subsidiary to supply equipment and supervise the construction and commissioning for three power projects, each 1600 MW in Rajasthan and Madhya Pradesh.

 

The company’s revenue growth primarily came from completion of ongoing projects, primarily for its clients in the energy business. The strong order book position further raises bullishness on the company’s future revenue streams.

 

Along with the revenue growth, expenses increased as well, but were lower than the total revenues. Total expenses increased by 19.0% on year at INR 65.7 billion, primarily owing to cost of raw materials, employee benefit expenses, interest outgo, and other expenses. Comparatively, total revenue, which includes the company’s income from investments as well, grew by 25.9% on year at INR 67.0 billion.

 

Raw material costs surged by 18.0% on year at INR 47.9 billion, and employee benefit expenses increased by 14.4% on year at INR 14.7 billion during the period under review. The interest outgo increased by 11.6% on year at INR 2.0 billion, and other expenses surged by 43.2% on year at INR 4.1 billion.

 

Bharat Heavy Electricals’ receivables from its clients was flat at around INR 9.5 billion during the quarter under review. In a note to its financial statements, the company said it has deferred creating a provision of INR 2.1 billion for a project in Sudan which is stuck on account of the civil war in that country. The company remains hopeful to recover the amount.

 

For Apr-Sept, its losses after tax narrowed down to INR 1.2 billion from INR 2.7 billion in the year-ago period, while the revenue increased by 19.2% on year at INR 120.7 billion.

 

Shares of Bharat Heavy Electricals jumped after the company declared its results. The shares closed 6.0% higher at INR 229.75 on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Vidhi Verma

 

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