May 6, 2009

BHEL - LONG TERM BET

BHEL is the largest Public sector engineering and manufacturing enterprise in India in the energy-related/infrastructure sector. BHEL was established more than 40 years ago & the company has been earning profits continuously since 1971-72 and paying dividends since 1976-77. It has achieved NAVRATNA status also.

BHEL has
**Installed equipment for over 90,000 MW of power generation -- for Utilities, Captive and Industrial users.
**Supplied over 2,25,000 MVA transformer capacity and other equipment operating in **Transmission & Distribution network up to 400 kV (AC & DC).
**Supplied over 25,000 Motors with Drive Control System to Power projects, Petrochemicals, Refineries, Steel, Aluminum, Fertilizer, Cement plants, etc.
**Supplied Traction electrics and AC/DC locos to power over 12,000 kms Railway network.
**Supplied over 1 million Valves to Power Plants and other Industries.

BHEL's operations are organized around three business sectors, namely Power, Industry- including Transmission, Transportation, Telecommunication & Renewable Energy - and Overseas Business.

BHEL, received new orders worth Rs 59,700 crore during the year ended March 31, 2009, its highest in a year, 20% more than the previous fiscal & more than twice its revenues in 2008-09. This has come about even as there is a slowdown in the economy.

BHEL’s order backlog has now reached Rs 1,17,000 crore ($23 billion), 37% more compared to same period in the previous year. The total order book is equivalent to nearly four and a half times the sales for the year. Growth in order book was even higher than the 29% growth in total revenue, which stood at Rs 27,500 crore for 2008-09. About 75% of the new orders for BHEL came from power sector, equivalent to 17,000 mw of generation capacity. The company’s export orders increased 41% to Rs 3,265 crore, despite a near-recessionary global economic scenario.

Some of the significant orders for the year were for supercritical range of equipment having 660 mw and 800 mw capacity. BHEL has also received orders for generators from Nuclear Power Corporation of India (NPCIL) for 700 mw nuclear reactors and a high value order of Rs 5,040 crore from Jindal Power, for setting 2,400 mw power plant.

BHEL had raised its production capacity for power generation equipment from 7,000 mw to 10,000 mw in 2007-08. It is in the process of raising the capacity to 15,000 mw with further plans to take it to 20,000 mw by 2012. So BHEL is all set to complete all the future projects within deadline and is going to be the great value addition to your kitty.
Face Value - 10.00; No. of Shares – 48, 95, 18, 750
Bonus – May 2007 in 1:1 ratio
Market Cap - 83,556.17
EPS (TTM) - 59.07; P/E - 28.90; Industry P/E - 18.72
Book Value - 220.10
Div (%) - 152.50; Div Yield (%) - 0.89
Reserves – 10, 284.69 Cr
Mar - 08 Mar - 07 Mar - 06 Mar - 05 Mar - 04
Sales Turnover
19,365.46 17,237.53 13,289.28 9,653.07 7,915.07
Total Income 20,761.69 17,999.00 13,820.02 10,087.80 8,339.70
Net Profit 2,871.11 2,414.70 1,679.16 1,003.75 658.15

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