New Delhi: Bharat Heavy Electricals Ltd, or Bhel, the maker of equipment that lights three of every five homes in India, said first quarter profit rose 33%, better than analysts estimated, as utilities placed more orders to meet demand.
Net income gained to Rs384 crore in the three months ended 30 June from Rs289 crore a year earlier, New Delhi-based Bhel told the Bombay Stock Exchange on Monday.
Five analysts in a Bloomberg survey estimated a median profit of Rs330 crore. Sales rose to 4,330 crore from 3,230 crore.
State-controlled Bhel had Rs9,500 crore of orders in hand at the end of June as demand during peak hours widened to 17% in the year ended 31 March from 14% a year earlier. The company’s margins have come under pressure from an increase in its wage bill and the price of raw material, including steel.
The company’s net profit margin declined to 8.88% from 8.93% a year earlier.
The price of steel in the first quarter was 13% higher than a year earlier, according to Niraj Shah, an analyst at Centrum Broking Pvt. in Mumbai. Bhel is able to pass on cost increases of as much as 20% to about half of its customers, finance director C.S. Verma said on 3 April.
Shares of Bhel have declined 42% this year, compared with a 32% drop in the benchmark Sensitive Index of the Bombay Stock Exchange.
The shares fell 1.7% to Rs1,506.3 in Mumbai on Monday. The earnings were announced after trading ended.
Debarati Roy in Mumbai contributed to this story.