Moneycontrol Bureau
Overseas brokerage Morgan Stanley says state-run power equipment maker BHEL's biggest orderwin is at risk now post deferral of terms of reference for Yadadri thermal project due to ecological concerns. The stock fell more than 3 percent intraday Tuesday.
The company won 5X800 MW Yadadri order, the single largest order in history, from Telangana State Power Generation Corporation (TSGENCO) in Q1FY16. The Rs 18,000 crore order formed 81 percent of order inflows in H1FY16, and 23 percent of BHEL's backlog (ex-slow moving orders). It was also planned to be set up on a fast track basis, with clearances to be expedited.
As per today's media reports, the Expert Appraisal Committee (EAC) under the Ministry of Environment and Forests (MoEF) has deferred terms of reference (ToR) for the Yadadri project due to ecological concerns. An NGO had raised concerns on the tributary of the Krishna River flowing through the project's site in October 2015, and the answers provided on the issue (by TSGENCO) were verbal and unclear.
Morgan Stanley is unsure on the extent of delay of this project as TSGENCO has been asked to address NGO's concerns comprehensively and come back with an action plan for the recommendation of the MOEF sub-committee which visited the location, but this creates risk to BHEL's FY17 financials.
At 13:13 hours IST, the scrip of Bharat Heavy Electricals was quoting at Rs 168.40, down Rs 3.25, or 1.89 percent on the BSE.
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