1

PROJECT REPORT

ON

BHARAT HEAVY ELECTRONICS LIMITED

Under the guidance of:

Professor Kiran Mehta

Submitted by :

Shivi Sharma

Cun120550078
 2

ACKNOWLEDGEMENT

I would like to express my gratitude for the people who were part of this Project Report,
directly or indirectly people who gave unending support right from the stage the idea was
conceived.
In particular I would like to thank Mr. Naveen Sharma, Sr. Superintendent in B.E.L, who
gave me some information about BHEL.
I would like to extend my heartiest thanks to Kiran maam providing me with the necessary
resources and guidance for the paper without which we may not have been able to undertake
the survey.
 3

TABLE OF CONTENTS

PART-I

1. Industry Profile
 Heavy electrical industry
2. Company relative position in that industry
3. BHEL
 Company overview
 Achievements
 Listing information
 Initiatives taken by BHEL
 SWOT analysis
 Outlook

PART-II
1. Analysis and interpretation of various financial parameters
2. Graphs
3. Capital structure of company for last years
4. Dividend of company for last 5 years
5. BHEL at glance
6. Comparative study of the Bajaj steel industry ltd company of the
same industry
7. Competitors of BHEL
8. Balance sheet of BHEL
9. Key Ratios
10.News relevant to the company
11.Bibliography
 4

Part I

Industry Profile
 5

Heavy Electrical Industry

A brief description:-

Heavy industry sector is one of the core sectors of Indian economy. Therefore, it’s fund
requirements are inverse keeping in view the scale and size of the industrial units in the
sector, the financial requirements are also huge. The heavy engineering sector is driving
primarily by technology. This, coupled with the fact that the initial investment required for
heavy engineering or capital goods manufacturing facilities is relatively high, creates
relatively high entry barriers. Any business enterprises viability eventually boils down to cost
– return trade off. Cost of funds is undoubtly, the most important determined of the viability.
This becomes more crucial in heavy engineering sectors

The development of the Indian heavy electrical machinery industry is directly linked to the
Performance of the Power sector in India. With India’s development, the need for more and
Better Power supply has become essential for industries to grow. Thus with increasing focus
on capacity expansion in the Power sector, the heavy electrical machinery manufacturing
industry is expanding vigorously.

BACKGROUND:-

Heavy Electrical Industry covers power generation, transmission and distribution and
utilization equipments. These include turbo generators, boilers, various types of turbines,
transformers, switchgears and other allied items. Majority of the products manufactured by
heavy electrical industry in the country, which includes items like transformers, switchgears
etc. are used by all sectors of the Indian economy. Some major areas where these are used are
the multi core projects for power generation including nuclear power stations, petrochemical
complexes, chemical plants, integrated steel plants, non-ferrous metal units, etc.
 6

HISTORY:-

India is the only other developing country besides China, which produces a full range of
electric power generation and transmission equipment. In fact, the history and growth of
(Bharat Heavy Electricals Ltd.), a public sector enterprise under in the country, symbolizes
the overall growth pattern of heavy electrical industry in the country.BHEL has the unique
distinction of being one of the very few companies in the world, manufacturing all major
power generating equipment under one roof .The industry has been upgrading the existing
technology and is now capable of taking up turnkey contracts also for export markets.

The industry has been deli censed. Foreign collaborations are allowed with 100 percent
FDI.The country is planning to add 150,000 MW power generation capacities in the next 10
years. This will generate substantial demand for heavy electrical equipments. The heavy
electrical industry is capable of manufacturing transmission and distribution equipment up to
400 KV AC and high voltage DC. The industry has taken up the work of up gradation and
transmission to the next higher voltage system of 765 KV and have upgraded their
manufacturing facilities to supply 765 KV class transformers, reactors, CTS, CVT, bushing
and insulators, etc.

BHEL

systems for power plants, defence and other applications. The company has commenced
manufacture of large scale desalination plants to help augment the supply of drinking water

Company background

1956 - Company was set up at Bhopal in the name of M/s Heavy electrical (India) Ltd. in
collaboration with AEI, UK. Subsequently, three more plants were set up at Hyderabad,
Hardwar and Trichy. The Bhopal Unit was controlled by the company, the other three were
under the control of Bharat Heavy Electricals Ltd. - The Company`s object is to manufacture
of heavy electrical equipments. 1972 - In July the Operations of all the four plants were
integrated. 1974 - In January Heavy electrical (India) Ltd was merged with BHEL. - For the
manufacture of a wide variety of products, the company has developed technological
infrastructure, skills and quality to meet the stringent requirements of the power plants,
transportation, petro chemicals, and oil etc. - BHEL has entered into collaboration which are
technical in nature. Under these agreements, the collaborators have transferred, furnished the
information, documentation, including know-how relating to design, engineering,
manufacturing assembly etc. 1982 - BHEL also entered into power equipments, to reduce its
dependence on the power sector.
 7

BHEL has

1. Installed equipment for over 90000MW of power generation-for utilities, captive and
industrial users.
2. Supplied over 225000MW a transformer capacity and other equipment operating in
transmission and distribution network up to 400Kv (AC& DC)
3. Supplied over 25000 motors with drive control system to power projects, petro
chemicals, refineries, steel, aluminium, fertilizers, cement plants etc.
4. Supplied traction electrics and AC/DC locos to power over 12000kms railway
network.
5. Supplied over one million valves to power plants and other industries.

BHEL caters to core sectors of the Indian economy viz; power generation & transmission,
industry, transportation, telecommunication, renewable energy, defence etc. the wide network
of BHEL’s 14 manufacturing divisions, four power sector regional centres, over 100 project
sites, eight service centres and 14 regional offices enables the company to be closer to its
customers and provide them with suitable products, systems and services efficiently and at
competitive prices. Having attained ISO 9000 certification, BHEL is now well on its journey
towards total quality management (tqm). On the environmental management front, the major
units of bhel have4 already acquired the ISO 14001 certification,

Power sector

Power generation sector comprises thermal, gas, hydro and nuclear power plant business. As
of 31-3-2004, BHEL supplied sets account for nearly 71,255 MW or 64% of the total
installed capacity of 1, 11,151 MW in the country, as against nil till 1969-70.

BHEL has proven turnkey capabilities for executing power projects from concepts to
commissioning. It possesses the technology and capability to produce thermal sets with super
critical parameters up to 1000 mw unit rating and gas turbine-generator sets of up to 250 mw
unit rating. Cogeneration and combined-cycle plants have been introduced to achieve higher
plant efficiencies. To make efficient use of the high ash-content coal available in India,
BHEL supplies circulating fluidized bed combustion boilers to both thermal and combined-
cycle power plants.

The company manufactures 235 MW nuclear turbine generator sets and has commenced
production of 500 MW nuclear turbine generator sets.

Custom-made hydro sets of Francis, Pelt on And Kaplan types for different head discharge
combinations are also engineered and manufactured by BHEL. In all, orders for more than
700 utility sets of thermal, hydro, gas and nuclear have been placed on the company as on
date. The power plant equipment manufactured by BHEL is based on contemporary
technology comparable to the best in the world, and is also internationally competitive.

The company has proven expertise plant performance improvement through renovation,
modernization and upgrading of a variety of power plant equipment, besides specialized
know how of residual life assessment, health diagnostics and life extension of plants.
 8

Transmission

BHEL also supplies a wide range of transmission products and systems of upto 400KV class.
These include high voltage power & instrument transformers, dry type transformers, shunt &
series reactors, sf switch gear, 33KV gas insulated subn station capacitors, insulators etc. for
economic transmission of bulk power over long distances, High Voltage Direct Current
(HVDC) systems are supplied. Series and shunt compensation systems, to minimize
transmission loses, have also been supplied.

Industry sector

Industries

BHEL is a major contributor of equipment and systems to industries: cement, sugar,

fertilizer, refineries, petrochemicals, steel, paper etc. the range of systems and equipment
supplied includes: captive power plants, dg power plants, high speed industrial drive
turbines, industrial boilers and auxiliaries, waste heat recovery boilers, gas turbines, heat
exchangers and pressure vessels, centrifugal compressors, electrical machines, pumps, valves,
seamless steel tubes and process controls, control systems for process industries, and control
and instrumentation to people.

Transportation

Mosty of the trains operated by the Indian railways, including the metro in Calcutta, are
equipped with BHEL’s traction electrics and traction control equipment. The company
supplies electric locomotives to Indian Railways and diesel shunting locomotives to various
industries. 5000/4600 hp ac/dc locomotives developed and manufactured by BHEL have been
supplied to Indian railways. Battery powered road vehicles are also manufactured by the
company.

BHEL also supplies traction electrics and traction control equipment for electric locos, diesel
electric locos, and EMUs/ DEMUs to the railways.

Telecommunication

Bhel also caters to telecommunication sector by way of small, medium, and large switching
systems.

Renewable energy

Technologies that can be offered by BHEL for exploiting non-conventional and renewable
resources of energy include: wind electric generators, solar power based water pumps,
lighting and heating systems.

The company manufactures wind electric generators of unit size up to 250 KW for wind
farms, to meet the growing demand for harnessing wind energy.
 9

International operations

BHEL has, over the years established its references in over 50 countries of the world, ranging
from the United States in the west to new-Zealand in the far east. These references
encompass almost the entire product range of BHEL, covering turnkey power projects of
thermal, hydro and gas based type sub-station projects, rehabilitation projects, besides a wide
variety of products, like switch gear, transformer, heat exchangers,insulators,castings and
forgings. Apart from over 1100MW of boiler capacity contributed in Malaysia, some of the
other major successes achieved by the company have been in Oman, Saudi Arabia,
Libya,Greece,Cyprus,Malta,Egypt,Bangladesh,Azerbaijan,Sri lanka,Iraq etc. execution of
overseas projectys has also provided BHEL the experience of working with world renowned
consulting organizations and inspection agencies.

Technology Up gradation and research and development

To remain competitive and meet customers’ expectations, BHEL lays great emphasis on the
continuous up gradation of products and related technologies, and development of new
products. The company has upgraded its products to contemporary levels through continuous
in-house efforts as well as through acquisitions of new technologies from leading engineering
organizations of the world.

The corporate R&D division at Hyderabad leads BHEL’s research efforts in a number of
areas of importance to BHEL’s product range. Research and product development centres at
each of the manufacturing divisions play a complementary role.

The investments in R & D by the electrical industry are amongst the largest in the corporate
sector in India. Large electrical equipment used in steel plants, petrochemical complexes and
other such heavy industries are also being manufactured in the country. The domestic heavy
electrical equipment manufacturers are making use of the developments of the global market
with respect to product designs and upgrading of manufacturing and testing facilities. The
heavy electrical industry has established its reference in the global arena also. These
encompass thermal, hydro and gas based power plants, substation projects, rehabilitation
projects, besides a wide variety of products like transformers, photo voltaic equipments,
insulators, switchgears, motors, etc
 10

.COMPANY’S RELATIVE POSITION IN THAT INDUSTRY:-

It is an integrated power plant equipment manufacturer and one of the oldest and largest
engineering and manufacturing enterprise of India. It is world’s 12th largest power equipment
manufacturer. It is India’s ninth largest public sector undertaking. BHEL is one of the few
companies of the world who have the capability to manufacture entire range of power plant
equipment.

Forbes business magazine of the year 2011 ranked BHEL as the ninth most innovative
company of the world. BHEL is the only Indian engineering company to be listed. 2010
edition of Forbes Asia’s fabulous list placed BHEL at 4th place. BHEL has been
continuously earning profit since 1971-72.
 11

Bharat Heavy Electricals Limited (BHEL)

Company overview:-

Bharat Heavy Electricals (BHEL or the company) is an India-based engineering and

manufacturing company that develops electrical and power equipment in energy related and
infrastructure sector. It manufactures over 180 products under 30 major product groups and
caters to sectors including power generation and transmission, transportation, and renewable
energy, among others. The company operates in India and exports its products to several
countries.

BHEL is headquartered in New Delhi, India and employs about 46,748 people. The company
recorded revenues of INR418, 546.6 million ($9,178.7 million) during the financial year
ended March 2011 (FY2011), an increase of 26.2% over FY2010. The operating profit of the
company was INR72, 109 million ($1,581.4 million) during FY2011, an increase of 76.3%
over FY2010.

The net profit was INR60,533.6 million ($1,327.5 million) in FY2011, an increase of 39.9%
over FY2010.Note: The operating profit has been calculated after deducting the following
items from net turnover as mentioned in the company's "Consolidated Profit and Loss
Account" for FY2011: consumption of material, erection, and engineering expenses; other
expenses of manufacture; employees' remuneration and benefits; administration, selling, and
distribution provisions (net); and depreciation and amortization.
 12

Organization Structure of BHEL:-

BHEL is spread out over various parts of the country from Haridwar in North to Tiruchi in
South. Centralized policy making and decentralized administration Unit managers have
complete authority and power Always has been reviewing its organizational structure to
ensure customer needs are fulfilled and internal synergy is maximized BHEL is commercial
organization. The Powers of company officials are well defined at all levels in the
organization. The duties are assigned from time to time.

BHEL- Achievements:-

 Attained ISO - 9001 certification.

 BHEL have been upgraded to the latest ISO-9001: 2000 version BHEL has been
awarded ISO -14001 certification for environmental management systems and
OHSAS-18001certification for occupational Health and safety management systems.

 First Public Sector Company in the country to win the coveted ‘PRIZE’ through its
Haridwar unit under the CII Exim Award Scheme based on globally recognized model of
European Foundation for Quality Management

 BHEL's R&D ops contribute Rs 1,151 cr to turnover in 2005-06 [May 19

2006]NEW DELHI: Bharat Heavy Electricals Ltd on May 18 said the company has
achieved a turnover of Rs 1,151 crores during 2005-06 through products developed by
in-house research and development operations. This revenue was eight per cent of its
total revenue of Rs 14,410 crores in 2005-06. This was the result of a constant thrust
on developing new technologies and products, improving existing products and
systems in terms of reliability, cost and quality through in-house R&D efforts. The
company invested about Rs 150 crores on Research and Development of products and
systems during the year, which was among the highest in the country. The company
also filed for 84 patents, including three abroad, taking the total number of patents
filed till date to 339. Out of this, BHEL has been granted 26 patents and the rest are in
various stages of processing. Thirteen copyrights have also been filed. R&D and
technology development are of strategic importance to BHEL as it operates in a
competitive environment where technology is a major factor.
 BHEL to manufacture 800 mw thermal sets [Apr 14 2006]Catching up with the
advancement in global technologies, Bharat Heavy Electricals Ltd (BHEL), through
the efforts of its corporate research and development division in Hyderabad, is now
 13

equipped to manufacture 800 mw super-critical thermal power sets in the country.

Much sought-after by several players in power generation, including APGenco, for its
fuel efficiency, the super-critical technology has been till now viewed as the sole
domain of developed world. As part of its effort to emerge as one of the global
technology players in power systems and other new technologies, the R&D division
of BHEL has started fresh initiatives by setting up centres of excellence for surface
engineering (Coe-SE) and intelligent machines and robotics (CIMAR). According to
the source, CIMAR would be set up at the Corporate R&D division in Hyderabad at
an initial investment of Rs 4.77 crores. Among the new products, the BHEL
Corporate R&D has successfully completed design, supply and commissioning of
automated storage and retrieval systems for four of the 13 warehouses at the Central
Ordnance Depot, Kanpur.

1. BHEL inks agreement with IIT Madras for new courses [Apr 25 2006]
Chennai: Bharat Heavy Electricals Ltd and the Indian Institute of Technology-Madras
have signed a memorandum of understanding for collaborative research in the areas of
design of boilers, manufacturing, metallurgical engineering, mechanical engineering,
information technology and other areas of mutual interest. With the help of BHEL,
Tiruchi, IIT-M will establish a research centre at the BHEL campus for the purpose.
IIT-M will select MS/PhD research scholars to work as research associates/project
associates. BHEL on its part will make available its research facilities and laboratories
for the purpose. The collaboration has also given scope for IIT-M to start two new
courses one on energy engineering and another on welding engineering. The courses
will start from the academic year 2006-07. BHEL, which designs power plant boilers
for handling a variety of coals, is also interested in getting into coal research.

2. BHEL secures Rs 80 cr export order from EETC [May 10 2006]NEW DELHI:

Bharat Heavy Electricals Ltd (BHEL) has bagged its largest ever export order for
transformers worth Rs 80 crores from Egyptian Electricity Transmission Co (EETC).
BHEL will supply 14 transformers of 125 MVA to the state-run Egyptian company as
a part of the order. These transformers would be installed in eight sub-stations at
different locations in Egypt. The transformers, to be built at the company's Jhansi
plant, would be installed and commissioned under BHEL supervision. The company
had earlier executed a boiler project at Al Arish in Egypt. With the order for
transformers, BHEL has also established itself in the transmission market in Egypt.
BHEL had earlier reported a six-fold increase in its export orders booking for the
fiscal ended March 31 at Rs 3,348 crores. These orders contributed to one-fifth of the
company's total orders booked last year. With this BHEL is poised to achieve a
quantum growth in its export business driven by consolidation in existing markets and
widening its export base through expansion of existing basket of products and
services and entering new markets.

3. BHEL net profit up 62 pc(the tribune,3 june 2006)BHEL has posted a net profit of
Rs 867.95 crores for the quarter ended March 31,2006, as compared to Rs 534.28
crores for the quarter ended March 31, 2005, an increase of 62.45 pc. Total income
 14

has increased from Rs 4,518.94 crores in Q4 FY 04-05 to Rs 5728.96 crores for Q4

FY 05-06.It has posted a net profit of Rs 1679.16 crores for the year ended March 31,
2006(FY 05-06) as compared to Rs 953.40 crores for the urea ended March 31, 2005.
Total income has increased from Rs 9977.36 crores in FY 04-05 to Rs 13820.02
crores for FY 05-06.The board of directors has recommended a final dividend of 20
percent of equity of the company, making it to total of 145 percent of the equity share
capital of the company for the financial year 2005-06. This includes the interim
dividend of 40 percent and special dividend of 85 percent already paid during the
year.

 Workers’ participation in management yields savings at BHEL, Hardwar

DEHRA DUN, Nov 16: Empowerment of employees through the "quality the areas of
import substitution, revamping of old machine tools and safety over the past two
decades based on the principle of people-building and mutual development, the
"quality circle" was adopted by the BHEL’s Hardwar Plant in the year 1981 and has,
since then, yielded savings of nearly Rs five crores, according to Mr Ashbin Dear,
Public Relations Officer of the organisation. The quality circle guides the combined
efforts and knowledge of workmen of a particular section. There are more than four
hundred quality circles actively working to enhance the excellence on the process,
quality and delivery fronts, Mr Dear said. Coordinators and facilitators along with
other members of the workers’ groups identify problems and think of solutions
collectively to prevent defects and maintain overall quality. Mr Dear said upgrading,
renovation and modernisation of hydro sets installed at various power stations
equipped with BHEL and non-BHEL equipment was being now undertaken by the
Hardwar unit through its research and development efforts. The Hardwar unit of
BHEL has received an order of Rs eight crores from Power Development
Corporation, Jammu and Kashmir, to carry out renovation and modernisation of the
lower Jhelum Hydro Electric Project. This project is equipped with turbine and
operator equipment supplied by BHEL and the project was commissioned in 1980.
Another order, worth Rs thirty crores, was received by the BHEL plant for renovation,
modernisatup rating prating of the units of Ganguwal and Kotla Hydro Electric
Projects under Bhakra Beas Management Board and will ensure an increased output
of the generating units by as much as twenty per cent. Earlier, one unit each of the
above machines was renovated and up rated by the BHEL resulting in a similar output
increase for these machines. More than a hundred sets of different capacities supplied
by BHEL, Hardwar, are commissioned at various power stations all over the country.
The hydro sets are tailor-made to suit varying hydro electric parameters
 15

Listing Information:-

Face Value 2.0

Market Lot of Equity Shares 1

BSE Code 500103

BSE Group A
 16

BHEL has put in place a number of initiatives, as follows,

.

1. Strengthening company’s core businesses of Power Generation, Transmission &

Distribution, Transportation and Industrial Systems & Products, through accelerated
project completion and consequent benefits to customers, along with new initiatives in
marketing, technology, facility up-gradation and modernisation, enhancing operational
effectiveness etc.
i. .
2. Business Development efforts in related and allied areas utilising the organisational
strengths and forming customer focused specialised business groups e.g. formation of
Oil Sector R&M Business Group to address business in Renovation and Modernisation
of off-shore and on-shore oil platforms, downstream petroleum refining areas and Power
Plant Operational Services Group to provide Operations and Maintenance (O&M) ,
Services for Power Plants.

3. After Market Services being the areas for future growth, spares and R&M services
business have been integrated into one focused group. R&M for hydro sets is an area
having major growth opportunity which BHEL is poised to tap.

4. Exploring Business opportunities in areas like Energy Conservation, Water

Management, Pollution Control and Waste Management, Ports, LNG terminals etc.

5. Positioning for Information technology Business leveraging the domain knowledge in

Power Sector& Engineering field to provide IT enabled services for Power Sector and
software services for Engineering Industry.

6. Sustain and Enhance Exports for products and services through multi-pronged
approaches like entering new territories, focus on product sales, entry into IPP segment,
offering O&M and LTSA, EPC, becoming a service centre for international Original
Equipment Manufacturers (OEMs) and setting up of manufacturing assembly and repair
enters in the regions of demand etc.

BHEL is also taking steps to re-position it to meet the demands of the new market economy
through suitable strategies keeping in view the ultimate objective of enhancing value for its
stakeholders.
 17

Swot analysis of bhel:-

STRENGTH

Robust research and development activity

Leading market positions

WEAKNESS

Safety issues

Non autonomy

OPPORTUNITIES

Expanding manufacturing capacity

Strong order intake

THREATS

International laws and regulations

Increasing price of raw material

 18

OPPORTUNITIES AND THREATS

 Government of India has embarked upon an ambitious programme of doubling the

generation capacity to ensure “Power on demand by 2012”. This would necessitate huge
mobilisation of resources to the tune of Rs.80,00,000 million including Transmission and
Distribution (T&D) sector which has been identified as a high priority area. Due to
inadequate investments in Transmission Sector so far, power evacuation from generating
stations remains a major bottleneck. Accordingly, a perspective plan to build 30,000
MW inter-regional transmission network and formation of national grid are being drawn
up. Distribution is another area which is being reformed to improve the financial health
of the State Electricity Boards (SEBs) through various initiatives like privatisation/
Corporatisation. In order to bring about improvements in the functioning of the
SEBs,Government has taken a number of initiatives including securitisation of
outstanding dues of SEBs.This development will improve the credit rating of SEBs
enabling raising of funds for investments.
 Government has been developing strategies to improve the hydro-thermal mix and
substantially step up the contribution of this clean and stably priced source of energy
through higher budgetary allocation and speedier clearance process. BHEL, being a
major equipment supplier, is likely to reap benefits from this initiative.
 Government is also taking steps to promote captive power capacity which is estimated to
be about 20,000 MW. A comprehensive Captive power generation policy for purchase
and wheeling of surplus power is being evolved, which is likely to boost investment in
this area. BHEL being a major player in this business segment stands to gain.

 Coal as a fuel will continue to dominate powergeneration in our country, more so for the
reason of energy security. To reduce the cost of power, pit-head and coastal plants are
planned to be set up to avoid high cost of transportation of coal and relieve the already
stretched rail network. In addition to this, from the point of view of greater thermal
efficiency and environmental considerations, Gas/ LNG based power plants will
continue to be the preferred choice of power plant builders in the medium term.
 During the year gone by, industries, to which BHELsupplies the capital goods,
experienced a slow rate of growth as well as stagnation in investment activity in the
country. Also, the prospects of investment activity picking up during the current year
seem difficult. Index of Industrial Production (IIP) is projected to grow by a higher
rate of 3.5% in 2002-03 compared to 2.7% in 2001-02, a positive signal for impending
industrial recovery. Among the sectors, Cement and Transportation are poised for
healthy growth in 2002-03.
 For optimal development of electrical energy in its totality, an integrated approach,
including capacity addition through Non-conventional sources has been adopted by the
Government. Accordingly, a target of 10700 MW through non-conventional sources has
been fixed for the period up to 2012.
 Distributed Generation (DG) and Combined Heat and Power (CHP) are emerging growth
opportunities in the near future. In addition to conventional DG technologies, Biomass,
Photo-voltaic, Wind turbines, Micro turbines and Fuel Cells are progressing at rapid
pace and promise to change the economic equation of this large and important market.
 19

 In order to accelerate rural electrification, it has been proposed to treat rural

electrification as a basic minimum service in the Prime Minister’s Gramodaya Yojna.

 Rural electrification plan for electrification of 62000 villages by 2007 and 18000 remote
villages (through renewable) by 2012 is being proposed.

OUTLOOK

While the Indian Economy is continuing to grow at slow pace, there are positive
impulses like on-going Restructuring and initiative. Reforms in the Power Sector,
enhanced focus on Distribution, vie increased outlay for Accelerated Power
Development and Reforms Programme (APDRP), creating regulatory system, new
Electricity Bill etc. Government’s commitment to enhance private and public
investments in the infrastructure is a positive aspect that will spur Industrial Growth
and enhance market prospects for industrial products in the coming years.
 20

Part II-

Analysis and Interpretation of Various

Financial Parameters
 21

CALCULATION OF:-

Change in Share Price of the Company in last five years ( On the basis of Monthly
Observations for long term and medium term analysis and on the basis of daily observations
for a short term analysis)

the Beta Value of the company for a period of last 5 years considering daily observations and
interpret it. Sub-divide the analysis on the basis of Long Term, Medium Term and Short
Term Analysis.

the Risk involved in stock price movement through Standard Deviation and coefficient of
variation for long term medium term and short term duration
 22

GRAPHS
 23

Data of daily basis

CLOSE PRICE
3000

2500

2000

1500

1000

500

0
01/Jan/08 01/Jan/09 01/Jan/10 01/Jan/11 01/Jan/12

CLOSE PRICE
 24

CLOSE of sensex
25000

20000

15000

10000
CLOSE of sensex
5000

0
 25

Return on price
2

1.5

0.5

0
01/Jan/08 01/Jan/09 01/Jan/10 01/Jan/11 01/Jan/12
-0.5

Return on price
 26

Return on sensex
0.15
0.1
0.05
0
01/Jan/08 01/Jan/09 01/Jan/10 01/Jan/11 01/Jan/12
-0.05
-0.1
-0.15
-0.2

Return on sensex
 0
1000
1500
2000
2500
3000

500
Jan/08
Jun/08
Nov/08
On monthly basis
Apr/09
Sep/09
Feb/10
Jul/10
Dec/10
May/11
Oct/11
CLOSE PRICE

Mar/12
Aug/12
Jan/13
CLOSE PRICE
27
 0
10000
15000
20000
25000

5000
Jan/08
May/08
Sep/08
Jan/09
May/09
Sep/09
Jan/10
May/10
Sep/10
Jan/11
CLOSE

May/11
Sep/11
Jan/12
May/12
Sep/12
Jan/13
CLOSE
28
 0.5
1.5

0
1
2

-0.5
Jan/08
Jun/08
Nov/08
Apr/09
Sep/09
Feb/10
Jul/10
Dec/10
May/11
Oct/11
Mar/12
Aug/12
Return on price

Jan/13
Return on price
29
 0.1
0.2
0.3

-0.3
-0.1

-0.2
Jan/08
Jun/08
Nov/08
Apr/09
Sep/09
Feb/10
Jul/10
Dec/10
May/11
Oct/11
Mar/12
Aug/12
Return on sensex

Jan/13
Return on sensex
30
 31

Yearly basis:-

3000

2500

Series1
2000
Series2

1500 Series3
Series4
1000 Series5
Series6
500

0
CLOSE PRICE
 32

25000

20000
Series1

15000 Series2
Series3

10000 Series4
Series5
5000 Series6

0
CLOSE
 33

2.5

1.5 Series1
Series2
1 Series3

0.5 Series4
Series5
0 Series6
Return on price
-0.5

-1
 34

0.4
0.3
0.2
0.1 Series1
0 Series2
-0.1 Return on sensex Series3
-0.2 Series4
-0.3 Series5
-0.4 Series6
-0.5
-0.6
-0.7
 35

Capital structure of the company for last five years

(Rs crores)
Paid Up
From To Class Of Authorized Issued Paid Up Paid Up
Face
Year Year Share Capital Capital Shares (No’s) Capital
Value
Equity
2011 2012 2,000.00 489.52 2447600000 2 489.52
Share
Equity
2010 2011 2,000.00 489.52 489520000 10 489.52
Share
Equity
2009 2010 2,000.00 489.52 489520000 10 489.52
Share
Equity
2008 2009 2,000.00 489.52 489520000 10 489.52
Share
Equity
2007 2008 2,000.00 489.52 489520000 10 489.52
Share
 36

Dividend of the company for last five years

Year Month Dividend (%)
2013 Jan 106
2012 May 184
2012 Feb 136
2011 May 179
2011 Mar 133
2010 May 123
2010 Jan 110
2009 May 80
2009 Jan 90
2008 May 63
2008 Jan 90
2007 May 60
2007 Jan 125
 37

BHEL AT A GLANCE: -

Turnover [Rs. In Crores]:-

1200

1000

800

600
Series1
400

200

Profit Before Tax [Rs. In Crores]

1200

1000

800

600
Series1
400

200

0
 38

Net Profit [Rs. In Crores]

1200

1000

800

600
Series1
400

200

R&D Investment [Rs. In crores]

1200

1000

800

600
Series1
400

200

0
 39

Record Performance under difficult market conditions:-

 Financial –highest turnover and profit
 XI plan capacity addition – nearly double of that achieved in X plan period.
 Increased focus on Engineering and R&D- highest R&D expenditure and highest
patents / copyrights field.

2010-2011 2010-2011 2011-2012 % change

(Provisional)

Turnover 43337 41299 49301 increase 19.4

Profit before 9006 8487 10001 increase 17.8

tax
Net Profit 6011 5665 6868 increase 21.2

Net worth 20154 19808 24947 increase 25.9

Earnings Per 24.56 23.15 28.06 increase 21.2

Share
R&D 982 982 1162 increase 18.3
Investment
 40

Comparative study of the following company of the same industry:

BAJAJ STEEL INDUSTRIES LIMITED, a professionally managed organization is

engaged in offering a technically advanced solution to the cotton Ginning & Pressing
Industry. Backed by well-furnished CNC Turning Centers from Taiwan, CNC Planomillers,
Drilling & Assembly Centers, we have been designing high tech Cotton Processing Machine
for higher as well as accurate production. Our more than 100 years of experience assists us in
developing machines to gin and press cotton at lowest per unit cost at optimum capital
investment. Using advanced manufacturing practices, we design ginning and pressing
machines under Technical Collaboration from Central Institute for Research on Cotton
Technology (CIRCOT ICAR), the Pioneer Technical Body of Government of India in respect
to Cotton Ginning & Pressing Technology. Our machines give highest production at lowest
cost with best fiber parameters and lowest electrical power consumption per unit of
production in trouble free manner. Today, we have carved a niche as one of the key
Decorticator Manufacturers and Auto Feeder Machine Suppliers based in India. Adhering to
ethical business policies, we have become an approved supplier, under Technology Mission
on Cotton & Technology up gradation fund for cotton ginning & pressing plant machinery by
Ministry of Textiles, Government of India. On the grounds of our right wok ethics, we have
spread the business regime to all over India, Bangladesh, Egypt, Kenya, Madagascar,
Malaysia, Myanmar, Nigeria, Pakistan, Peru, South Africa, Tajikistan, Tanzania, Uganda,
Zambia, Zimbabwe and many other countries. Last but not the least, we always endeavor to
maintain a long lasting relationship of trust with the esteemed clients.
 41

The summary page of Bajaj Steel Industries Ltd. captures the information on its Live Stock
Price and Volume, 52 Week High Low, Intraday and Historical Price Chart, Key Ratios,
F&O Quotes, Competitors, Comparative Analysis, Buy Sell Recommendations, Company
News and Announcements, Shareholding Pattern, Key Quarterly and Annual P&L A/c items,
and Community Prediction

Quarterly - Bajaj Steel Industries Ltd.

Sep'12 Jun'12 Mar'12 Dec'11 Sep'11
INCOME:
Net Sales Turnover 76.91 41.63 70.21 105.31 88.88
Other Income 0.62 0.55 0.88 0.46 0.55
Total Income 77.53 42.18 71.09 105.77 89.43
EXPENSES
Stock Adjustments 6.34 -6.97 1.70 4.43 5.98
Raw Material Consumed 48.63 38.24 44.99 72.58 50.18
Power and Fuel 0.00 0.00 0.00 0.00 0.00
Employee Expenses 4.88 4.65 5.46 5.82 5.41
Administration and Selling Expenses 0.00 0.00 0.00 0.00 0.00
Research and Development
0.00 0.00 0.00 0.00 0.00
Expenses
Expenses Capitalised 0.00 0.00 0.00 0.00 0.00
Other Expenses 9.94 7.29 14.59 11.16 21.87
Provisions Made 0.00 0.00 0.00 0.00 0.00
TOTAL EXPENSES 69.79 43.21 66.75 94.00 83.44
Operating Profit 7.12 -1.58 3.46 11.31 5.44
EBITDA 7.74 -1.03 4.35 11.77 5.99
Depreciation 1.26 1.26 1.44 1.39 1.39
EBIT 6.48 -2.29 2.90 10.38 4.60
Interest 1.66 1.73 1.69 1.68 1.87
EBT 4.82 -4.02 1.21 8.70 2.72
Taxes 0.26 0.00 0.40 2.81 0.59
Profit and Loss for the Year 4.56 -4.02 0.81 5.89 2.13
Extraordinary Items 0.00 0.00 0.00 0.00 0.00
Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00
Other Adjustments 0.00 0.00 0.00 0.00 0.00
Reported PAT 4.56 -4.02 0.81 5.89 2.13
KEY ITEMS
Reserves Written Back 0.00 0.00 0.00 0.00 0.00
Equity capital 2.35 2.35 2.35 2.35 2.35
Reserves and Surplus 0.00 0.00 0.00 0.00 0.00
Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00
Agg. Non-Promoter Shares(lacks) 14.89 14.89 14.89 14.89 14.89
Agg. Non-Promoter Holding (%) 63.38 63.38 63.37 63.38 63.37
Government Share 0.00 0.00 0.00 0.00 0.00
Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00
EPS (Rs.) 19.41 -17.09 3.45 25.06 9.08
 42

Yearly - Bajaj Steel Industries Ltd.

Mar'12 Mar'11 Mar'10 Mar'09 Mar'08
INCOME:
Net Sales Turnover 315.48 204.38 212.26 229.08 187.83
Other Income 2.29 1.58 2.27 5.49 1.65
Total Income 317.77 205.96 214.52 234.58 189.48
EXPENSES
Stock Adjustments 13.52 -9.88 -12.90 6.71 -3.86
Raw Material Consumed 196.89 147.68 131.55 156.41 136.23
Power and Fuel 0.00 0.00 0.00 0.00 0.00
Employee Expenses 21.43 20.18 15.88 8.24 15.14
Administration and Selling Expenses 0.00 0.00 0.00 0.00 0.00
Research and Development
0.00 0.00 0.00 0.00 0.00
Expenses
Expenses Capitalised 0.00 0.00 0.00 0.00 0.00
Other Expenses 61.67 33.96 53.99 31.18 24.23
Provisions Made 0.00 0.00 0.00 0.00 0.00
TOTAL EXPENSES 293.51 191.95 188.53 202.54 171.74
Operating Profit 21.97 12.43 23.73 26.55 16.09
EBITDA 24.26 14.01 26.00 32.04 17.74
Depreciation 5.61 5.48 5.14 4.37 2.54
EBIT 18.64 8.54 20.86 27.66 15.20
Interest 6.85 5.91 5.60 4.54 4.73
EBT 11.80 2.63 15.26 23.13 10.46
Taxes 3.80 0.92 5.01 7.31 3.40
Profit and Loss for the Year 8.00 1.71 10.24 15.82 7.06
Extraordinary Items 0.00 0.00 0.00 0.00 0.00
Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00
Other Adjustments 0.00 0.00 0.00 0.00 0.00
Reported PAT 8.00 1.71 10.24 15.82 7.06
KEY ITEMS
Reserves Written Back 0.00 0.00 0.00 0.00 0.00
Equity capital 2.35 2.35 2.20 2.20 2.20
Reserves and Surplus 0.00 441.19 44.12 0.00 0.00
Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00
Agg. Non-Promoter Shares(lacks) 14.89 14.89 14.40 14.37 14.20
Agg. Non-Promoter Holding (%) 63.37 63.37 65.44 65.33 64.53
Government Share 0.00 0.00 0.00 0.00 0.00
Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00
EPS (Rs.) 34.03 7.26 46.56 71.91 32.11
43
 44

Competitors of BHEL

In this kind of economy, it’s no surprise that BHEL has competitions to keep the market in
their hands. Their biggest competitor being Larsen and Turbo (L&T), though still a bit far
away, in future they are a concern for BHEL, especially since they have greater turnover,
profit and assets at present and only defeated in terms of market share. 73% of energy
production is by BHEL manufactured equipments.

Here’s a list of all the competitors in the Indian market for energy sector with their particular
details from Top News-
 45

Balance sheet - Bharat Heavy Electricals Ltd.

Particulars Mar'12 Mar'11 Mar'10 Mar'09 Mar'08

Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months
Share Capital 489.52 489.52 489.52 489.52 489.52
Reserves & Surplus 24,883.69 19,664.32 15,427.84 12,449.29 10,284.69
Net Worth 25,373.21 20,153.84 15,917.36 12,938.81 10,774.21
Secured Loans 0.00 0.00 0.00 0.00 0.00
Unsecured Loans 123.43 163.35 127.75 149.37 95.18
TOTAL LIABILITIES 25,496.64 20,317.19 16,045.11 13,088.18 10,869.39
Assets
Gross Block 9,729.62 8,049.30 6,579.70 5,224.43 4,443.03
(-) Acc. Depreciation 5,409.83 4,648.82 4,164.74 3,754.47 3,462.21
Net Block 4,319.79 3,400.48 2,414.96 1,469.96 980.82
Capital Work in Progress. 1,324.63 1,762.62 1,550.49 1,212.70 658.47
Investments. 461.67 439.17 79.84 52.34 8.29
Inventories 13,444.50 10,963.03 9,235.46 7,837.02 5,736.40
Sundry Debtors 26,336.13 27,354.62 20,688.75 15,975.50 11,974.87
Cash And Bank 6,671.98 9,630.15 9,790.08 10,314.67 8,386.02
Loans And Advances 14,217.32 13,267.07 4,801.24 4,616.67 7,366.17
Total Current Assets 60,669.93 61,214.87 44,515.53 38,743.86 33,463.46
Current Liabilities 33,638.01 31,469.58 28,097.73 23,415.10 16,632.97

Provisions 7,641.37 15,030.37 4,417.98 4,975.58 7,608.68

Total Current Liabilities 41,279.38 46,499.95 32,515.71 28,390.68 24,241.65

NET CURRENT ASSETS 19,390.55 14,714.92 11,999.82 10,353.18 9,221.81
Misc. Expenses 0.00 0.00 0.00 0.00 0.00
TOTAL ASSETS (A+B+C+D+E) 25,496.64 20,317.19 16,045.11 13,088.18 10,869.39
 46

Key Ratios

Years Mar-12 Mar-11 Mar-10 Mar-09 Mar-08

Debt-Equity Ratio 0.0 0.0 0.0 0.0 0.0

Long Term Debt-Equity Ratio 0.0 0.0 0.0 0.0 0.0

Current Ratio 1.8 1.6 1.4 1.4 1.5

Fixed Assets 5.7 6.0 5.9 5.9 5.1

Inventory 4.1 4.4 4.0 4.2 4.4

Debtors 2.2 2.2 1.9 2.0 2.0

Interest Cover Ratio 201.9 165.5 197.7 158.9 126.1

PBIDTM (%) 22.2 21.8 20.5 18.3 21.9

PBITM (%) 20.6 20.6 19.1 17.1 20.6

PBDTM (%) 22.1 21.7 20.4 18.2 21.8

CPM (%) 15.6 14.9 13.8 12.2 14.5

APATM (%) 14.0 13.7 12.5 11.0 13.2

ROCE (%) 28.6 35.9 45.5 40.7 45.2

RONW (%) 30.9 33.3 29.9 26.5 29.2

PE 9.3 17.5 28.4 24.6 36.8

EBIDTA 11,153.5 9,604.3 7,082.0 5,213.7 4,763.0

DivYield 2.5 1.5 1.0 1.1 0.7

PBV 2.5 5.0 7.3 5.7 9.3

EPS 27.7 117.7 84.2 61.2 55.8

 47

News relevant to the company:-

Bharat Heavy Electricals Ltd - Record Date

Source: NSE India04/03/2011

Type: Corporate

Bharat Heavy Electricals Limited has informed that the Company has fixed March 21, 2011
as the 'Record Date' to ascertain the names of the shareholders/beneficial owners of the
company to whom the interim dividend shall be payable, if approved by the Board of
Directors at its Meeting to be held on March 15, 2011.

Bharat Heavy Eel - Fixes Record Date for Interim Dividend

Source: BSE India23/01/2013

Type: Corporate

Bharat Heavy Electricals Ltd has informed BSE that February 06, 2013, has been fixed as a
Record Date for the purpose of Interim Dividend.

Bharat Heavy Ele - Board declares Interim Dividend

Source: BSE India01/02/2013

Type: Corporate

Bharat Heavy Electricals Ltd has informed BSE that the Board of Directors of the Company
at its meeting held on February 01, 2013, has declared and approved payment of Interim
Dividend @106% i.e. Rs. 2.12 per equity share for the financial year 2012-13.

Interim Dividend shall be paid/ dispatched on February 15, 2013

 48

BHEL to set up 1980 MW thermal power project in Bihar

Source: Dion Global05/02/2013

Type: Corporate

State-run Bharat Heavy Electricals Ltd (BHEL) today announced that it has secured a
contract worth Rs 2,854 crore from Nabinagar Power Generation Company Ltd for setting up
a 1,980 MW thermal power project in Bihar.

"BHEL has bagged a contract for supply of the Steam Generator Package for three coal-fired
thermal units of 660 MW each. Valued at Rs 2,854 Crore, the order has been placed on
BHEL by Nabinagar Power Generation Company Ltd," the power plant equipment
manufacturer said in a statement.

Nabinagar Power Generation Company is a joint venture of NTPC Ltd and Bihar State
Electricity Board for this project.

BHEL - Updates on Outcome of AGM

Source: BSE India19/10/2012

Type: Corporate

Bharat Heavy Electricals Ltd has submitted to BSE a copy of the Minutes of 48th Annual
General Meeting (AGM) of the Company held on September 19, 2012

Bharat Heavy Ele - Grant of Maharatna status to BHEL

Source: BSE India01/02/2013

Type: Corporate

Bharat Heavy Electricals Ltd has informed BSE that Ministry of Heavy Industries and Public
Enterprises, Department of Public Enterprises vide its letter dated February 01, 2013, has
informed that the competent authority has approved the grant of Maharatna status to Bharat
Heavy Electricals Limited (BHEL). The delegation of powers, exercise of delegated powers
etc. will be governed as per guidelines laid down vide Departments O.M. of even number
dated February 04, 2010, which inter alia, provide that the exercise of delegated Maharatna
powers is subject to appointment of requisite number of non-official Directors as per SEBI
guidelines
 49

Bibliography

1. http://economictimes.indiatimes.com/bharat-heavy-electricals-
ltd/stocknews/companyid-11831,cn-bharat-heavy-electricals-ltd.cms
2. http://economictimes.indiatimes.com/bajaj-steel-industries-
ltd/stocks/companyid-13980.cms
3. http://ww5.nationalstockexchangeofindia.com/
4. http://www.moneycontrol.com/india/stockpricequote/engineering-
heavy/bharat-heavy-electricals/BHE
5. http://money.rediff.com/companies/Bharat-Heavy-Electricals-
Ltd/13510039
6. www.google.com