BHEL posts Q3 loss of Rs 1102 crore: stock nosedives 12 per cent

State run engineering and manufacturing company BHEL posted a disappointing set of numbers on Thursday, February 11 after market hours. Company posted Q3 losses along with poor operational performance.

Consolidated revenue from normal business activities for Q3FY16 declined by 14.08 per cent to Rs 5325.57 crore as against Rs 6198 crore posted in corresponding quarter of the previous fiscal. Revenue at the core power sector business fell 9 per cent. While that points to pressure on realizations, costs remained at elevated levels.

Operational performance was dismal as EBITDA plunged by 658 per cent into the negative territory. Operational loss for Q3 stood at Rs 1638.7 crore as compared to a profit of Rs 293.87 crore posted in the previous quarter of the last fiscal. Consumption of raw materials as a percentage to sales revenue increased by 314 basis points to 62.89 per cent owing to component material purchased at higher costs. Employee cost as a percentage to revenues saw a substantial jump by 511 basis points to 27.08 per cent.

Loss for the third quarter expanded to Rs 1102 crore as against the last quarter losses. Other income too decreased by 37.77 per cent Y-O-Y to Rs 170.56 crore.

Operating losses for the core power business widened, even after adjusting of the provision. Performance at the industries division, which generates one-fifth of the company’s revenues, dwindled further. The core power sector registered an operating loss of   Rs 1165 crore. Power sector was primarily affected due to poor pace of execution and delays.

BHEL’s outstanding order book position for the quarter ending December 2015 stands at about Rs 1,09,201 crore. BHEL in a separate filing to the stock exchange informed about order win worth Rs 3500 crore from NTPC for supply power equipment.

Responding to the poor set of Q3 numbers BHEL stock plunged 12 per cent in trade to hit an-intraday low of Rs 105.70. The stock has decreased by more than 58 per cent in trade in the past 6-months, as the dismal performance of the power equipment major continues.