It is my proud privilege to present the 51st Annual Report of your
Company for the financial year 2014-15. My message to you echoes the
views of about 45,000 employees of BHEL family working to provide
sustainable business solutions in the fields of energy, industry and
Amidst the arduous external economic and business environment, your
company continued to face challenges in 2014-15 but, throughout the
year, we demonstrated an exceptional resilience to these headwinds.
From managing growth to managing slowdown, your company has steadily
strengthened its inherent competitiveness as reflected from sustained
market leadership, continued focus on innovation and project execution
Recent policy initiatives taken by the Government such as allocation of
coal blocks through e-auction, rationalization of fuel prices,
expeditious clearance of projects and boost to Defence & Transportation
sector etc. are likely to improve business environment and provide
momentum to existing and upcoming projects.
I would like to share some highlights of 2014-15 and provide few
thoughts on both the key focus areas of your Board and the future
prospects of your company:
- BHEL has achieved a Turnover of Rs. 30,947 Crore and a Net profit
ofRs. 1,419 Crore during 2014-15.
- Despite a sharp contraction in the market and fierce competitive
environment, BHEL retained its leadership position with 72 percent
market share in Indian Power sector for the second consecutive year.
BHEL secured orders worth Rs. 30,814 Crore- an increase of 10% over
last year including BHELs second largest order worth Rs. 7,788 Crore
for 2x660 MW TANGEDCO Ennore SEZ on EPC basis.
- During 2014-15, your company synchronized/ commissioned 11,941 MW of
power plant equipment, more than 10,000 MW - 3rd year in a row. With
this, your company has joined the elite club of select global giants
having an installed base of over 150 GW of power generating equipment.
- Continuing with its focus on R&D and innovation, your company
invested Rs. 1,019 Crore on R&D, and recorded a turnover of Rs. 7,300
Crore from in- house developed products and services. BHEL also filed
the highest-ever 453 patents and copyrights in a year, enhancing the
companys intellectual capital to 3,010.
- Your company has formed a consortium with Mishra Dhatu Nigam Ltd.
(Midhani) and Hindustan Shipyard Ltd. (HSL) for jointly bidding for
indigenously building P-75 (i) submarines for the Indian Navy.
- 2014-15 marked a turnaround in Indian Hydropower sector with addition
of 736 MW to Central utilities, highest in a decade. This entire 736 MW
of Hydroelectric projects was successfully commissioned by BHEL.
- During the year, the company secured export orders from 23 countries
worth Rs. 720 Crore. A major milestone was commissioning of four power
plants in overseas markets in Rwanda, Sudan, Ethiopia and Oman.
Positioning for Future
With the revival in business sentiments, stream of opportunities are
expected in the traditional as well as new areas of business, which
shall enable BHEL to regain the growth trajectory.
- Accelerating Project execution is one of the key focus areas of BHEL.
Your company has already augmented its capacity for power plant
equipment manufacturing to 20,000 MW p.a. BHEL signed an MoU with the
newly formed Telangana state for 6,000 MW Power projects and received
two major EPC orders from TSGENCO for 1x800 MW Kothagudem TPS & 4x270
MW Bhadradri TPS. This has been followed by a historic landmark of
securing the single largest EPC order worth Rs. 17,950 Crore for 5 x
800 MW (4000 MW) Supercritical Thermal power project to be set up at
Yadadri, in Nalgonda district of Telangana. The company is all set to
create new benchmarks in execution. We are also favourably placed in a
number of other new tenders.
- In its effort to continue its sustained leadership position in the
Indian power sector, BHEL has enhanced its thrust on EPC business and
expanded its portfolio by adding Flue-Gas Desulphurisation (FGD), Water
Management systems, Air Cooled Condenser, and other Balance of Plant
(BoP) systems. Increasing the level of indigenisation in supercritical
technology and development of Advanced Ultra Supercritical Technology
are the major stategies in the power sector.
- Focus on cost optimization through increased indigenisation of
supercritical technologies, higher value additions, increased vendor
base and design/layout optimization efforts aided the company in
- Company''s focus on cash realization during the year has resulted in
retaining cash surplus position. The rising trend of debtors has also
- As part of Diversification strategy, the company set a new record in
its Solar Photovoltaic (PV) business in a single year by supplying 50
MWp of SPV modules. Your company also received the largest value single
order for 64 sets of IGBT based Traction Converters from CLW. Also,
with the capability to design and offer all variants of 765 kV class
transformers and Shunt Reactor, BHEL is well positioned to capitalize
on the premium 765 kV voltage segment.
- BHEL has always been at the forefront in the engineering sector of
the country in R&D efforts. R&D expenditure of the company has been
more than 2.5% of the turnover for more than 5 years now. Your company
has indigenously designed and developed Fuel Flexible Boiler capable of
blending & firing a wide range of imported & indigenous coals.
- BHEL offers sustainable solutions to its customers throughout the
entire operational lifecycle of the power plants by offering
engineering and technology inputs for reducing greenhouse gas
emissions, water consumption, less auxiliary power consumption and less
fuel requirement. BHEL manufactured & commi- ssioned Indias first 660
MW (SG & TG) and 800 MW (SG) sets with supercritical technology.
- BHEL values its employees as its greatest asset. People Development
strategy of BHEL is focusing on developing each person''s competencies
in alignment with business plans through implementation of initiatives
like e- learning modules for developing leadership competencies in
association with Harvard Business School, performance linked pay career
planning and succession planning. Your company was selected as one of
the Best Companies to Work For'' by leading magazine Business Today''.
Marching on the journey ahead
The overall business scenario is improving. Green shoots in the economy
and the recent Make in India initiative by the Government of India have
potential to take Indian Industry into a new phase of growth. Your
company will continue to build on its strengths through focus on
Capability Enhancement, Project Execution, Cost Competitiveness &
Quality Diversification, Engineering & Technology, and People
Development as envisaged in BHEL''s 6-Point Agenda.
I am grateful to you, our stakeholders - all business partners
including customers for reposing their faith in us, employees for their
resolve and unstinted devotion, our Members on the Board for their
wisdom and continuous support, members of the Management Committee for
efficiently steering the company''s resources and you, our shareholders
for evincing trust & faith in BHEL & its Management. Various
Ministries of GoI, particularly the Department of Heavy Industry have
been providing valuable guidance and support in our efforts.
Energy & Infrastructure, being the fulcrum of economic development,
would continue to depict a rising trend till demand-supply deficit is
addressed in its entirety. Energy security and climate change issues
are determining the future course of development. This represents a
huge opportunity to be leveraged by your company with its wide range of
quality products & services. Therefore the Board of your company is
confident of realising its vision of becoming a global engineering
enterprise providing solutions for a better tomorrow, honouring our
Success is the sum of many small efforts. I look forward to your
unfaltering support in our earnest efforts to overcome the challenges
and fulfil our quest to take the company to greater heights.
With best wishes,
(B. Prasada Rao)
Chairman & Managing Director
August 08, 2015