'BHEL to announce its biggest order ever'

state owned power equipment maker Bharat Heavy Electricals Ltd (BHEL) has posted a jump of over 22% in its net profit this year. BHEL chairman

K Ravi Kumar, Chairman and Managing Director, BHEL
and managing director K Ravi Kumar told ET that the company is now looking forward to soon announce its biggest order ever for six major power plants with a capacity to generate 600 mw each.

Your net profit has been below market expectations, what has caused such subdued numbers?
There is an inventory of about nine months. So whatever we re purchasing of up to August we are using up to May. From June onwards it will improve and secondly, there is some finished assemblies we are sending to sites. So, even though there is sales growth but not much value addition. But numbers are in line with what we have told. During this year we ll do a 20-25% sales growth and 25-30% growth in profit. I am quite confident we ll exceed sales target this year and our profits will rise more than 30%.

What is the order book looking like? Has there been a slowdown in the order inflow at all?
Infact, it has increased. Our guidance initially for the year was Rs 50,000 crore. But it must be more than Rs 50,000 crore. It may be coming to Rs 55,000 crore during the financial year.

So you re increasing your guidance there but can you give us a break up from where the orders are coming?
This year in our first quarter, we ve booked orders from private sector. 100% orders have been booked from the private sector. I think the government orders will come in the second quarter and we are quite confident that we ll be able to reach 55000 crore order booking in the financial year.

Could you explain why the government's orders have not come at all?
There were some during elections. Some tenders could not be floated after the code of conduct was lifted. A lot of orders will come in second quarter. We are quite confident the ratio will tilt towards the government sector in third and fourth quarter.