Comments
The stock of power equipment maker BHEL was among the worst hit in the large-cap space, in the last one year. Falling 41 per cent over this period, BHEL had a tough time dealing with poor order inflows. This was the key factor affecting stock's performance.
In 2009, BHEL's almost-monopoly status was put to serious test by active participation by Chinese players in the Indian boiler, turbine and power equipment space. This was a result of a sharp pick-up in private participation in the power utility space.
Private power producers such as Lanco Infratech, Reliance Power and Adani Power preferred foreign players who offered cheaper equipments. Soon local players also entered the field. This resulted in BHEL conceding market share.
Robust order activity by both private players and state utilities still ensured that BHEL got a pie of the order inflows. But post 2011, concerns such as availability and pricing of coal and not-so-favourable power purchase agreement clauses resulted in a dip in new power projects. This was the key reason behind BHEL's poor order inflow status in FY12.
BHEL ended FY-12 with a 14 per cent increase in net profits. Order inflows at Rs 22,100 crore, stood reduced to a third of previous year's inflows.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.