BHEL Q2: Order book falls 25% to Rs 1.22 lakh cr

By Pragya Bharadwaj, Research Analyst at CNBC-TV18

State--owned power equipment maker BHEL has disappointed the street by reporting lower-than-expected topline and bottomline numbers while the only positive was its EBITDA margin in the second quarter of financial year 2012.
Net profit fell by 9.77 percent year-on-year to Rs 1,274 during the quarter while revenues grew marginally to Rs 10,399 crore from Rs 10,299 crore year-on-year. Shares of the company declined 4.5% post the earnings announcement.
Analysts on an average had expected net profit of Rs 1,446 crore on revenues of Rs 11,448 crore for the quarter.
BHEL' s outstanding order book at Rs 1.22 lakh crore, down 25%,YoY is quite disappointing, say analysts. Order inflow has been impacted due to structural issues related to coal linkages, environment/forest clearances, land acquisition and gas availability. Industrial orders also remain weak. Corporate capex recovery has not yet commenced owing to lower demand and higher borrowing costs in the economy
However, BHEL will continue to see 2 more years of poor performance --- things are expected to look up only from FY16, say brokerages. Order book will improve only when the sector will overcome hurdles like fuel and lack of off take arrangements.