Bharat Heavy Profit Rises 1.9% as Power Orders Dwindle in India

Bharat Heavy Electricals Ltd. (BHEL), India’s biggest power-equipment maker, posted a 1.9 percent increase in third-quarter profit, falling short of analysts’ estimates, as utilities reduced orders.

Net income rose to 14.3 billion rupees ($290 million) in the three months ended Dec. 31, from 14.03 billion rupees a year earlier, the company said in a statement to the Bombay Stock Exchange today. The average estimate of 30 analysts in a Bloomberg survey was a profit of 14.8 billion rupees.

India’s power utilities have shelved plans for $36 billion in new plants because of soaring coal prices across Asia, stalling efforts to boost generation capacity to cut blackouts and drive expansion in Asia’s third-largest economy. State-owned Bharat Heavy is seeking an increase in import duty on equipment as it faces increasing competition from Chinese rivals.

“Bharat Heavy’s order book over the last two years points to a slowdown as several orders are from utilities that have financial closures pending or have uncertain access to fuel,” Bhargav Buddhadev, vice president at Ambit Capital Pvt., said by telephone before the earnings announcement. “Their market share for equipment orders is being also being threatened by cheaper and more efficient Chinese competitors.”

Bharat Heavy shares fell 3.1 percent to 273.60 rupees at close in Mumbai trading, the biggest drop since Dec. 29. The stock has declined 36 percent in the past 12 months compared with a 7.8 percent drop in the benchmark Sensitive Index. The earnings were announced after the market closed.

The equipment maker had 1.47 trillion rupees of orders in hand as of Dec. 31, according to a statement. That compares with 1.58 trillion rupees of orders a year earlier. Sales rose 19 percent to 105.5 billion rupees.

-- Editors: John Chacko, Indranil Ghosh

To contact the reporter on this story: Kartikay Mehrotra in New Delhi at kmehrotra2@bloomberg.net.

To contact the editor responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.