BHEL Q3 net profit surges 30.9% to Rs 1,403 cr

State-run Bharat Heavy Electricals (BHEL) has announced its results for the quarter ended December 2010. It has reported net profit at Rs 1,403 crore in Q3FY11 as against Rs 1,072 crore in same period of last year, a growth of 30.88%.

Net sales jumped 24.63% to Rs 8,849.3 crore from Rs 7,100.3 crore (YoY). Operating profit margin improved at 21.44% versus 20.18%. Bottomline was above the expectations while topline was in-line with estimates; CNBC-TV18 expected net profit at Rs 1,280 crore and net sales at Rs 8,780 crore. Numbers were not so encouraging if accounting change is factored in. Accounting change led to additional revenues of Rs 444 crore, which makes YoY figures uncomparable.  Margin Surprise * Raw material as a percentage of sales down 1.1% YoY
* Employee expenses as a percentage of sales down 190 bps YoY
* Other expenses as a percentage of sales up 200 bps YoY
* Margin improvement looks like a consequence of the recognizing 2.5% of contract revenue after trail ops Bottomline * Tax rate at 32.1%, down 280 bps 
* Looking at net margins PAT would be down by nearly Rs 70cr if addl rev is not taken Silver Lining * Order book at Rs 1,58,000 crore
* Implied order inflow of over Rs 13,000 crore
* Would need just about Rs 23,000 crore now to meet FY11 target