BHEL is the largest engineering and manufacturing enterprise in India in the energy-related/infrastructure sector, today.

BHELwas established more than 40 years ago, ushering in the indigenous Heavy Electrical Equipment industry in India - a dream that has been more than realized with a well-recognized track record of performance. The company has been earning profits continuously since 1971-72 and paying dividends since 1976-77. BHEL manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian Economy viz., Power Generation & Transmission, Industry, Transportation, Renewable Energy, etc. The wide network of BHEL's 14 manufacturing divisions, four Power Sector regional centres, over 100 project sites, eight service centres, 18 regional offices and one subsidiary enables the Company to promptly serve its customers and provide them with suitable products, systems and services -- efficiently and at competitive prices. The high level of quality & reliability of its products is due to the emphasis on design, engineering and manufacturing to international standards by acquiring and adapting some of the best technologies from leading companies in the world, together with technologies developed in its own R&D centres. BHEL has acquired certifications to Quality Management Systems (ISO 9001), Environmental Management Systems (ISO 14001) and Occupational Health & Safety Management Systems (OHSAS 18001) and is also well on its journey towards Total Quality Management. 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 one million Valves to Power Plants and other Industries. BHEL's operations are organised around three business sectors, namely Power, Industry - including Transmission, Transportation and Renewable Energy - and Overseas Business. This enables BHEL to have a strong customer orientation, to be sensitive to his needs and respond quickly to the changes in the market. BHEL's vision is to become a world-class engineering enterprise, committed to enhancing stakeholder value. The company is striving to give shape to its aspirations and fulfill the expectations of the country to become a global player.

Main manufacturing facilities :

Bhopal (Madhya Pradesh) Haridwar (Uttarakhand) [1] Hyderabad (Andhra Pradesh) Jhansi (Uttar Pradesh) Tiruchirapalli(Tamil Nadu) Ranipet (Tamil Nadu) Bangalore (Karnataka) Jagdishpur (Uttar Pradesh)

Milestones :
Powering India's growth, that too during the economic downturn has its hazards: high expectations and credible delivery. For K. Ravi Kumar, 60, outgoing chairman and managing director of Bharat Heavy Electricals Ltd. (BHEL), a Navratna public sector undertaking (PSU) entrusted with building capacity and capability to meet the power forecast for the 11th Plan and beyond, it seemed a trust appropriately placed and carried out with unstinting commitment. BHEL sets have been generating 73 per cent of the total power generated in the country and installed equipment for over 90,000 MW of power generation, for utilities, captive and industrial users. Policy planners who set up BHEL in 1953 envisaged it as the vehicle to make India self-reliant in the manufacture of power plant equipment. "In a country with practically no industrial infrastructural base, it was easier said than done," says Kumar, who recalls how BHEL had to acquire technology from Russia and Czechoslovakia to build up a strong knowledge and skill base.

Led by Ravi Kumar's people-centric management mantra, BHEL's wealth creation has seen significant milestones, including many firsts like the completion of the first 1,000 MW coal-based turnkey project of the National Thermal Power Corporation in Andhra Pradesh in a record 39 months and introduction of new technologies like supercritical thermal sets in the field of coal and gas-based power plants using advanced class gas turbines in the country. BHEL has grabbed the largest-ever contract for the manufacture and supply of 150 electric locomotives for Indian Railways valued at Rs 990 crore. "BHEL achieved export orders from 22 countries in five continents, taking the company to an all-time high order inflow of Rs 10,254 crore last year," adds Kumar. Bucking the global recessionary trend, it has achieved a spectacular top line growth of 31 per cent, an all-time high turnover of Rs 28,033 crore and recorded its highest-ever net profit of Rs 3,138 crore. With an order book of over Rs 1,17,000 crore, BHEL is readying to take on China as a formidable rival by equipping itself with technology, facilities and trained manpower. That's the power of BHEL.

BHEL at a Glance

Rupees (In Million) 2006-07 Turnover Value Added Employee (Nos.) Profit After Tax Retained Earnings Total Assets Net Worth Total Borrowings Debt : Equity Per Share (in Rupees) : - Net worth - Earnings 179.5# 49.3# 220.1 58.4 22.6 18.4 18739 7182 42124 2415 1722 22280 8788 89 0.01 2007-08 21401 8323 43636 2859 1986 29352 10774 95 0.01 CHANGE (%) 14.2 15.9 3.6 18.4 15.3 31.7 22.6 6.3 0.0

Turnover and profit distribuition over time :

The Stock :

SWOT (Strength, Weaknesses, Opportunities and Threats) analysis :

Strengths:
Sound engineering base and ability to assimilate Relatively stable industrial relationship Access to contemporary technologies with the support from renowned collaborators. Ability to set up power plants on turnkey basis, complete know- how for manufacture of entire equipment is available with the company. Ability to manufacture or procure to supply spares. Fully equipped to take capital maintenance and servicing of the power plants. Largest source of domestic business leading to major presence and influence in the market. Ability to successfully overhaul and renovate power stations equipment of different international companies. Low labour cost.

 For non- BHEL products, services and spares are not easily available and if they are, price charged are very high. Sound financial position in terms of profitability and solvency. Low debt equity ratio (even lower than 0.5:1) for all the years under study, enabling company to raise capital.

Weaknesses:
Difficulty in keeping up the commitments on the product delivery and desired sequence of supplies. Larger delivery cycles in comparison with international suppliers of similar equipment. Inability to provide suppliers credit, soft loans and financing of power projects. Lack of effective marketing infrastructure. Due to poor financial position of state electricity boards, which are the major customers of BHEL in India, liquidity position of BHEL is not satisfactory. Being a public sector company BHEL is suffering from sub optimality of control due to: 1. Displacement of social objectives by political objectives, which may lead to redundant costs and also rising costs. 2. Direct political intervention in managerial decision over an arm length relationship that would restrict governments task of setting appropriate managerial incentive structure. 3. Private goals that lead to budget growth and employment growth. 4. Internal inefficiencies in bureaucratic activity.

Opportunities:
Demand for power and hence plant equipment is expected to grow. Private sector power plants to offer expanded market as utilities suffers resource crunch. Ageing power plants would give rise to more spares and services business. Life expansion program for old power stations. Export opportunities. Easy processing of joint ventures/ collaboration/import/ acquisition of new technology. Financial and operational autonomy for profit making public sector enterprises. To make the public sector more efficient government has decided to grant enhanced autonomy and delegation of powers to the profit making public sector enterprises.

Threats:
Increased competition both national and international. Multilateral agencies reluctant to lend to power sector because of poor financial management of S.E.Bs More concessions to private sector and not to government owned utilities like NTPC or S.E.Bs, so future power projects would be opened up in private sector. Level playing ground not available, foreign companies spending much more on business promotion tactics.