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MUMBAI: Shares of Bharat Heavy Electricals Limited (BHEL) tanked 18% on Monday. While the company's consolidated net loss fell to Rs1,036.32 crore in Q4FY21 from Rs1,532 crore in the year-ago period, it remained loss making at the operating level.

Ebitda loss stood at Rs126 crore in the March quarter, largely on account of higher other expenses, which surged 156% year-on-year. (y-o-y).

At 01:15 pm, the BHEL stock traded at Rs67.8 apiece, down 11% from its previous close, while the benchmark index Sensex was down 0.4% at 52,267.03.

Order inflows fell 31% on year to Rs4,400 crore in 4QFY21.

“Overall, March quarter appears to be muted as operating losses further widened despite some rebound in execution amid a low base. However, recent execution headwinds in power segment due to various issues leading to project delays and working capital stress continues to major near term challenges and needs to be resolved quickly to regain profitability amid pandemic," ICICI Securities said in a note.

For financial year 2020-21, BHEL's consolidated net loss was at Rs2,697.1 crore compared with Rs1,466.01 crore in FY20. Revenue from operations fell 20.5% to 16,295.80 crore.

Total order book as of 31 March stood at Rs1.02 trillion. Orders from power segment was at 84,179 crore and from the industry segment at Rs11,344 crore. Export orders were at Rs6,567 crore.

Analysts at Motilal Oswal Financial Services, in an earnings note, said, "BHEL continues to struggle with a weak ordering environment in the power sector, high receivables around Rs31,300 crore, and huge FY21 employee cost around 31% of sales. In FY21, working capital stood elevated 101% of sales (99 per cent/63 per cent of sales FY20/FY19), weighed by a higher inventory and receivables and poor execution."

"While orders are few and far between, the pricing environment remains highly competitive, limiting the scope for margin expansion...the company has won its first order for sulphur recovery unit (SRU) for Indian Oil Corporation Panipat and is restructuring its solar business division. Any material financial impact is still a long time away," it added.


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