The past year has been a defining one for your company BHEL as we
became a ''Maharatna'' company, crossed Rs. 50,000 Crore turnover mark
and achieved the highest ever addition of 10,340 MW to India''s
electricity generation capacity while navigating through one of the
most difficult economic and business environment of our times. Despite
a challenging environment for Indian industry, your company has not
lost its focus on creating shareholders'' value. The following outlines
the milestones we have achieved during the year 2012-13:
- BHEL has achieved the highest ever turnover of Rs. 50,156 Crore
during 2012-13 registering a growth of 1% despite adverse business
conditions. With the Net Profit of Rs. 6,615 Crore, we were able to
maintain the level of previous five years (2007-12) average profit
margins of 14% on the back of strong focus on manufacturing
- Recognising the consistent performance over a longer period of
time, your company has been bestowed with the coveted ''Maharatna''
status by Govt. of India, resulting in further empowerment of the Board
for greater business agility.
- A total of Rs. 31,650 Crore of orders were received by your
company, which was an increase of 43% over 2011-12. It included 8 nos.
of TG, 9 nos. of Boilers and 7 nos. of ESP packages for supercritical
sets. Interestingly with market share of 67% in power sector, BHEL
continues to maintain its leadership position in Indian market despite
rising intensity of competition.
- Various initiatives taken by your company in recent past for
accelerated project execution have started fetching results. We were
able to synchronise/ commission all time high 10,340 MW of power plant
equipment including 9,328 MW in utility segment. Your company
successfully commissioned India''s first indigenously manufactured
subcritical set of 600 MW rating on EPC basis at North Chennai.
- With the objective of becoming an innovative developer of clean,
efficient, reliable and affordable products, systems and technologies,
we continue to relentlessly strengthen our technology and innovation
capabilities. BHEL invested Rs. 1,252 Crore in R&D during the year. The
highest ever 385 patents and copyrights were filed raising the
intellectual capital of BHEL to 2,170.
- Your company has signed MoU with Indian Railways for setting up a
green field coach factory for Mainline Electric Multiple Unit at
Bhilwara, Rajasthan. This is a significant step in our diversification
Positioning for Future
We are at a critical juncture in our history as we endeavour to sustain
growth momentum, increase shareholder wealth and fulfil our vision of
becoming a global engineering enterprise. We are proud of the work your
company has done to augment manufacturing capacity, enhance pace of
project execution, strengthen engineering and technology capabilities,
and people development.
- The Company has adopted its Strategic Plan 2012-17. The plan
attempts to steer the company towards becoming a global engineering
enterprise. Key drivers of our success are expanding our offerings in
Power Sector by building EPC capability, focus on Industry businesses,
expansion of spares & services and adoption of collaborative approach.
- Power sector will continue to remain major contributor in our top
line with transportation and transmission emerging as next big business
verticals. Strategies are in place to strengthen our presence in
Nuclear, Renewable and Water segments.
- Efforts are being made to make supply chain agile and accelerate
project execution through sustained focus on vendor base expansion,
scaling up procurement through technology initiatives, advanced
manufacturing action, global sourcing etc.
- We are working towards developing lower rating sets with
supercritical parameters providing alternatives to the Utilities to
take advantage of this eco-friendly and fuel efficient technology.
- To expand our nuclear energy portfoilo, efforts to increase scope
by offering products beyond conventional island in Nuclear business are
- BHEL''s collaborative initiatives to address the growing demand
potential in Railway Transportation including Metro & Suburban Railways
include initiative with Indian Railways for setting up a greenfield
Mainline Electrical Multiple Unit (MEMU) Coach Factory in Rajasthan.
- Considering the National Action Plan on Climate Change targeting
15% of electricity generation from renewables by 2020, BHEL is looking
towards expanding its capacity to manufacture photo voltaic modules &
- We have constituted R&M Systems Group (RMSG) to address emerging
opportunities in Renovation and Modernisation of Power Plants.
- In a bid to address the aspirations of the company to become a
preeminent supplier of Industrial Boiler, Nuclear Steam Generator &
supplier of equipment for process Industries, merger of BHPV Vizag with
BHEL is under way. Further, in a bid to make headway in new product
areas like Alternators for Traction applications etc. facilities of
BHEL-EML Kasargod, a joint venture of BHEL and Kerala Govt., are being
- ''Engineering and Technology'' is our strength. To uphold our
reputation for excellence in our core capability, we will continue to
upgrade existing products to contemporary levels and develop new
products through continuous in-house efforts as well as through
acquisition of new technologies.
Looking ahead, the Board and Management of your company will continue
to execute various strategies to develop existing assets, optimize
business portfolio through diversification, strengthen financial
performance and drive operational efficiencies throughout the
organization. I am confident that our strategic endeavours would
generate sustainable growth, stronger cash flows, and better returns on
capital and greatly improve shareholder wealth.
I would like to thank my fellow Directors and members of the Management
Committee for their wisdom and support. I would also like to extend a
special thanks to each and every shareholder of BHEL, whose trust and
confidence have been the motivating force in all our endeavours. I
thank all our customers and business associates in India and abroad for
their unstinted loyalty and steadfast patronage of our products and
services. Various Ministries of GoI, particularly the Department of
Heavy Industry, have been providing valuable guidance and support in
our efforts. Finally, a word of thanks to more than 48,000 employees of
BHEL who are making these successes happen. I am extremely proud of
their outstanding performance over this period and have full confidence
in their ability to deliver even greater success going forward.
With all the ingredients of success, dedicated people, engineering and
technological excellence and right business strategies in place, your
company is well positioned to meet the demands of a growing industry
and deliver the type of consistent results for which this company is
I look forward to your unwavering support while continuing the growth
momentum in coming years too.
With best wishes,
New Delhi (B. Prasada Rao)
August 14, 2013 Chairman & Managing Director