BHEL Q2 net profit plummets 64% to Rs465 crore

State-run Bharat Heavy Electricals Limited (BHEL) has reported a net profit of Rs456 crore for the quarter ended 30 September 2013, a 64-per cent drop from the Rs1,275 crore net profit reported in the corresponding quarter of the previous financial year.

BHEL had reported a 49-per cent drop in profit in the first quarter of this financial.

This is the fifth straight drop in profit of the country`s largest power equipment maker, as a slowdown in demand hits sales.

BHEL reported lowest margins ever with earnings before interest, taxes, depreciation and  amortisation (EBITDA) slipping by 78 per cent to Rs411 crore from Rs1,900 crore reported in the year-ago period and margins slipping to 4.6 per cent from 18.3 per cent reported in the year-ago period.

The integrated power plant equipment manufacturer saw its net sales during the July-September 2013-14 quarter fall 15 per cent to Rs8,819 crore as compared to sales of Rs10,400 crore reported in the year-ago quarter.

The company has also been struggling to recover money owed to it by some power generation firms as delays in bureaucratic approvals and land acquisition, as well as populist power pricing regimes forced them to sell power at a loss, denting their appetite for new projects.

BHEL`s order book stood at about Rs1,02,000 crore at the end of September, the company stated in a release.

Electricity generation in India has also been hit by shortages of coal and gas that have left power stations running below their normal capacity.

Financial results for the second quarter and the first half of the financial year ended 30 September 2013 included financial results of HPVP unit (erstwhile BHPV).

"Consequent to this, impact of HPVP unit for and up to the quarter ended 30 September 2013 includes turnover of Rs16.69 crore and PBT of (-)Rs191.35 crore. The impact on reserves and surplus is reduction by Rs311 crore," BHEL said in a statement.

"In view of this, figures for the current reporting period are not comparable with the previously reported period figures," the statement added.

Shares in BHEL fell as much as 2 per cent after the earnings were announced, but they later recovered and were up 1.3 per cent in a market that was down 0.25 per cent.