BHEL profit dips 8% at Rs 6,485 cr; payment backlog Rs 40k cr
New Delhi: Pulled down by higher finance and dearness allowance costs as well as mismatch in cash flows, state-owned BHEL on Monday reported 8 percent decline in net profit at Rs 6,485 crore for the 2012-13 fiscal.
The country's largest power equipment maker also saw its outstanding payments from customers rise to Rs 40,000 crore.
BHEL had reported a net profit of Rs 7,040 crore in the 2011-12 fiscal.
BHEL's turnover increased to Rs 50,015 crore in 2012-13, from Rs 49,510 crore in the previous fiscal. The company, which had planned a turnover of Rs 1 lakh crore by 2017, may revise this target.
"We had planned a turnover of Rs 1 lakh crore by 2017 but now we will relook at it," BHEL Chairman and Managing Director B P Rao said at a press conference.
He attributed the decline in company's net profit mainly to cash flow mismatch, increase in financing costs and Dearness Allowance.
"It is not possible for us to work if the cash is not coming," Rao said, adding that the customers not paying in time will not get priority at the time of delivery.
As on March 31, 2013, the outstanding payments (due to the companies by generation firms) were Rs 40,000 crore. It stood at Rs 38,000 crore last fiscal (2012-13).
Of the total outstanding this year, BHEL is hopeful of receiving Rs 20,000 crore in the next six months and the remaining amount is called "deferred debt", which is linked to the achievement of certain milestones.
"The customer always wants to retain part of the payment till the time the order is complete and links to certain conditions (milestones) after fulfilling them it is released," Director (Finance) BHEL P K Bajpai told reporters here.
"The company has to achieve certain milestones only then will they become collectibles, these companies are mainly from the power sector," he said.
The company's order inflow rose to Rs 31,528 crore in 2012-13, from Rs 22,096 crore in the previous fiscal, a jump of 42 percent.
Private sector contributed Rs 7,000-8,000 crore to the order-book of the company.
Bajpai said that the order-book position of the company would improve in the current financial year.
On whether the company will manufacture crucial solar power equipment indigenously, Rao said,
"We want to integrate into silicon and wafer (components which are currently imported) manufacturing and for that we require incentives from the government."
He added that the company is talking to the Ministry of New and Renewable Energy through its parent ministry -- Ministry of Heavy Industry and Public Enterprises -- on this.
Currently, solar power equipment is imported and assembled in India.
In 2012-13, BHEL commissioned a 5 MW grid-connected Solar Photo Voltaic plant for Karnataka Power Corporation Ltd at Mandya in Karnataka.
BHEL scrip closed at Rs 182.35 on the BSE, up 2.62 percent from the previous close.