Will diversify portfolio for next wave of growth, says BHEL

NEW DELHI: State-owned power equipment maker BHEL-2.52 % today said it will create a diversified portfolio for its next wave of growth that will include areas like solar energy, transportation and water business.

Going beyond thermal power, other areas for capitalising on emerging opportunities include defence and aerospace "to increase the share of business from non-coal areas", BHEL CMD Atul Sobti said at the 53rd Annual General Meeting here.

He said BHEL is facing newer challenges being thrown up by forces of change such as climate, technology disruptions, fragile geopolitics, newer regulations, suboptimal investment from private sector and changing energy-mix.

The company's manufacturing capacity for solar cells and modules has been expanded to 105 MW and 226 MW per annum, he said.

On building capacity and capability through in-house resources and collaboration with global technology leaders, he said BHEL has recently entered into a pact with Kawasaki Heavy Industries Ltd for the manufacture of stainless steel coaches and bogies for Metro Rail.

Sobti further said: "The recent launch of bullet train project from Mumbai to Ahmedabad and new metro rail projects would bring new business opportunities for us."

He said BHEL has achieved capacity addition of 45,274 MW during the 12th Five Year Plan period (2012-17), surpassing the target of 41,661 MW set by the government by 9 per cent.

On the defence sector, he said: "76/62 mm Super Rapid Gun Mount (SRGM) and Auxiliary Control System (ACS) was commissioned on INS Chennai, the third ship of the Kolkata- class stealth guided missile destroyers of the Indian Navy.

"With this, all the three ships of this class have been equipped with BHEL manufactured SRGM and ACS."

He added that despite intense competitive pressure during last fiscal, BHEL booked orders worth Rs 23,489 crore, ending the year with a total order book of Rs 1,05,200 crore for execution in 2017-18 and beyond.

"Efforts are being made to convert stranded/slow moving orders into executable ones. Around Rs 12,000 crore of non- executable orders have been converted to executable during the year (2016-17)," he added.

Customer-focused business groups have been created for nuclear, hydro, defence & aerospace, and transportation for strengthening diversification efforts, he said.

He further said that a dedicated 'Project Closure Synergy Group' has been created to ensure "early closure of project sites, optimise manpower utilisation, resolving outstanding issues with various stakeholders, and realising cash".

The BHEL achieved a carbon footprint avoidance of 14,378 MT CO2 equivalent during 2016-17 by generating 14.82 MU energy through in-house solar power installations.

Sobti also told shareholders that the company has recommended issue of bonus shares in the ratio of 1 bonus share for every 2 held.