BHEL, which has more than 75 per cent business coming from the power sector, suffered due to the slowdown in the same. CAG observed that as BHEL did not diversify into other business areas, its turnover reduced by more than half in three years when power sector went in lull.
“As BHEL had not effectively diversified into new/less operated business areas, both turnover and profitability declined sharply with slowdown in the power sector. BHEL’s turnover, which was Rs 49,510 crore in 2011-12, declined to Rs 26,587 crore in 2015-16; while profits of Rs 7,400 crore in 2011-12 turned into a loss of Rs 913 crore in 2015-16,” said the report.
Profits of BHEL plunged by 82 per cent -- the highest ever during Q1 2015-16 over the past year, owning mostly to their decrease in sales to the power sector. The company in a media statement in November 2017 said as a part of the new shift in the corporate plans, it will be creating new verticals within the company to capitalise on the massive infrastructure spending by the Govt. of India. Special focus would be on Indian Railways, defence and other industrial products to drive the next wave of growth,” said the company’s statement.
The report mentioned BHEL could not secure any of the four tenders finalised against competition during 2015-16. It also could not complete any of the projects selected for performance audit within scheduled completion time. “All 53 selected projects were commissioned with delays of three to 84 months. As a result, customers withheld Rs 1,966.07 crore towards liquidated damages against 37 of these projects,” cited the report.
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