New Delhi: Bharat Heavy Electricals Ltd's net profit more than halved to Rs 3,228 crore in the previous financial year on account of low volumes and challenges in the domestic power sector.
The power equipment major had posted a net profit of Rs 6,615 crore in 2012-13, BHEL said on Saturday.
The state-owned major's turnover declined to Rs 40,366 crore from Rs 50,156 crore in 2012-13, as per a regulatory filing on its provisional earnings for the year ended March 31, 2014.
“Profit impact is due to low volumes. Certain ongoing projects have got impacted as the Indian power sector continues to be besieged with issues relating to fund constraints, land acquisition, clearances and coal linkages,” BHEL said in a statement.
The power and industrial market segments continued to witness fewer project finalizations, the company said.
Order inflows fell to Rs 28,007 crore in the year ended March 2014 from Rs 31,650 crore in 2012-13. The company's total order book stood at Rs 1,01,538 crore.
According to the statement, focus on cost optimization through increased localization of supercritical technologies and higher value addition, among other factors, helped the company in its margins.
“Focus on cash realization during the year has resulted in coming back to cash surplus situation after a gap of four years. The rising trend of debtors has also been arrested,” it added.
BHEL said improved focus on project execution enabled it to “record highest ever commissioning/synchronization of 13,452 MW of power plants in domestic and international markets in 2013-14.”
Last month, Life Insurance Corp purchased a more than 4 per cent stake in BHEL from the government after a decision taken by an Empowered Group of Ministers.
BHEL's parent ministry, the Heavy Industry and Public Enterprises Ministry, had opposed a proposed disinvestment of shares in the company by the government on account of choppy market conditions.
The government held a 63.06 per cent stake in BHEL at the end of March.