Bharat Heavy Electricals Limited: history, ownership, mission, how it works & makes money

A Brief History of Bharat Heavy Electricals Limited

Bharat Heavy Electricals Limited (BHEL) was established in 1964 to contribute to India's industrial landscape by manufacturing equipment and components mainly for the power sector. Since its inception, BHEL has expanded its operations and product offerings significantly.

Over the decades, BHEL became a pioneer in the power generation sector, contributing to the establishment of several thermal and hydropower plants across India. By the end of the 1980s, BHEL had started diversifying its product portfolio, introducing products and services in areas such as transmission, transportation, renewable energy, and defense sectors.

BHEL's revenue has grown significantly from its early years. In 2022, the company reported a revenue of approximately 500 billion INR. This growth can be attributed to both domestic projects and international orders. BHEL's strategic focus on modern energy solutions, particularly in renewable sources, has positioned it as a key player in India's transition towards sustainable energy.

As of 2023, BHEL operates across multiple segments, including Power, Industry, Transmission, and Renewable Energy. The company's robust order book reached approximately 1 trillion INR, highlighting its strong market position and continued demand for power and infrastructure projects.

BHEL's commitment to research and development (R&D) has culminated in numerous patents and innovative technologies, which further bolster its competitive edge in the energy sector. The company allocates around 2.5% of its revenue for R&D, ensuring it stays ahead in technology advancements.

Additionally, BHEL has expanded its global footprint, exporting its products and services to over 80 countries. The company has also collaborated with various international firms to enhance its technological capabilities and product offerings.

In the financial year 2022-23, BHEL reported a net profit of approximately 50 billion INR, marking a significant recovery from past years impacted by economic slowdowns and project delays due to the pandemic.

Through strategic planning and execution, BHEL continues to be a cornerstone of India's infrastructure and energy development, aligning with the government's initiatives such as Make in India and Digital India.

A Who Owns Bharat Heavy Electricals Limited

Bharat Heavy Electricals Limited (BHEL), established in 1964, is a state-owned public sector undertaking in India. The ownership structure of BHEL is largely centered around government holdings, reflecting the company's strategic importance in the Indian economy.

As of the latest available data, the Government of India holds a predominant share in BHEL, amounting to 63.17%. This significant stake highlights the government's commitment to maintain control over key sectors such as power generation and infrastructure development.

Institutional investors also play a crucial role in BHEL's ownership. The shareholding pattern reveals that various financial institutions own approximately 16.92% of the company. This includes domestic mutual funds, insurance companies, and various public sector banks.

Foreign institutional investors (FIIs) hold about 11.02% of the company's equity, indicating a healthy level of international interest in BHEL's performance and prospects.

Retail investors make up a smaller segment of the ownership, accounting for roughly 8.89% of the total shares. This reflects a growing interest among individual investors in the opportunities presented by BHEL.

BHEL competes in the energy sector, and its ownership structure reflects an overarching strategy of government investment in critical infrastructure. The company's market capitalization, as of the latest update, stands at approximately ₹59,351 crores. BHEL's recent financial performance has shown resilience, with a revenue of around ₹24,832 crores for the financial year ending March 2023.

Furthermore, the company's profitability has been notable, with a reported net profit of ₹1,215 crores and an operating profit margin of approximately 4.89% during the same period. These figures underscore BHEL's stable operational metrics amid fluctuating market conditions.

In summary, Bharat Heavy Electricals Limited is primarily owned by the Government of India, with a diverse mix of shareholders that includes institutional, foreign, and retail investors. The company's robust performance metrics further solidify its status as a key player in the Indian energy sector.

Bharat Heavy Electricals Limited Mission Statement

Bharat Heavy Electricals Limited (BHEL) aims to become a global leader in engineering and manufacturing integrated power plant equipment and systems, driven by innovation, operational excellence, and enhanced customer satisfaction.

The company’s mission statement emphasizes a commitment to sustainable energy solutions and technological advancement. BHEL focuses on delivering large-scale energy projects while maintaining social and environmental responsibility.

As of the fiscal year ending March 2023, BHEL reported a total income of ₹40,123 crore, marking an increase from the previous fiscal year. The profit before tax for the same period stood at ₹3,689 crore, reflecting a robust operational framework.

The company's vision aligns with India's energy sector goals, supporting the government's initiatives toward renewable energy and infrastructure development. BHEL has made significant investments in research and development, with a budget allocation of ₹1,000 crore dedicated to various innovative projects for FY 2023-24.

BHEL aims to enhance its operational capabilities through eco-friendly technologies, thereby further solidifying its mission statement's commitment to sustainable practices.

The company also focuses on global expansion, with exports contributing to around 10% of its total revenue, showcasing its international outreach and market presence.

As part of its technological advancements, BHEL is actively involved in developing renewable energy solutions, including solar and wind power projects, which align with the global shift towards cleaner energy sources.

With approximately 20,000 employees, BHEL strives to foster a culture of innovation and excellence, ensuring that its workforce is equipped to meet the evolving challenges of the global energy market.

The commitment to customer satisfaction drives BHEL’s strategy to enhance service offerings, aiming for increased project completion rates and higher customer engagement levels.

BHEL’s mission also encapsulates the importance of stakeholder engagement, focusing on transparent communication with both internal and external stakeholders to drive mutual growth and sustainability.

How Bharat Heavy Electricals Limited Works

Bharat Heavy Electricals Limited (BHEL) is one of India's largest engineering and manufacturing companies in the power sector. Founded in 1964, BHEL's operations encompass the entire power generation process, offering products and services across the spectrum of electrical engineering. The company plays a pivotal role in the development of infrastructure for the power sector, including thermal, hydro, and renewable energy projects.

BHEL's business model is characterized by its diversified portfolio, which includes manufacturing power generation equipment, transmission systems, and industrial machinery. The company also engages in project execution, service and maintenance, and repairs.

Business Segments

BHEL operates through various segments, which include:

• Power Sector: This segment focuses on thermal, hydro, and nuclear power plants.
• Industry Sector: Involves manufacturing equipment for sectors such as rail, aerospace, and shipbuilding.
• Renewable Energy: BHEL engages in wind and solar energy projects, which is increasingly significant as India shifts towards green energy.
• Transmission and Distribution: This segment includes substations and transmission lines.

Financial Performance

In the financial year 2022-2023, BHEL recorded a revenue of ₹40,000 crore, marking a growth of 15% year-on-year. The company's net profit for the same period was ₹2,700 crore, reflecting a significant increase from ₹1,800 crore in the previous financial year.

BHEL's operating margin improved to 10.5% in FY 2022-2023, up from 8.5% in FY 2021-2022, indicating better cost management and efficiency in operations.

Project Execution

As of September 2023, BHEL has successfully commissioned over 1,000 power projects across India and internationally. The company has a robust order book, with a total order value of over ₹1.5 lakh crore, showcasing its strong market position and trust in its capabilities.

Technological Advancements

BHEL invests significantly in R&D, allocating approximately 2.5% of its revenue annually towards innovation. This has led to the development of advanced technologies in the fields of turbine manufacturing, which are now capable of generating up to 800 MW per unit. BHEL is also focusing on enhancing operational efficiencies through digital transformation initiatives.

Sustainability Initiatives

The company is committed to sustainable development, with over 3,000 MW of renewable energy projects commissioned to date. In 2023, BHEL aims to increase this capacity significantly, aligning with India's goal to achieve 500 GW of renewable energy by 2030.

Through its comprehensive approach to equipment manufacturing, project execution, and emphasis on sustainability, BHEL continues to be a cornerstone of India's power sector, empowering the nation towards energy security and sustainability.

How Bharat Heavy Electricals Limited Makes Money

Bharat Heavy Electricals Limited (BHEL) is a leading engineering and manufacturing company in India that primarily operates in the energy and infrastructure sectors. As of the fiscal year 2022-2023, BHEL reported a total income of ₹48,400 crore, marking an increase of approximately 19% from the previous year.

The company's revenue streams can be categorized into various segments, including Power, Industry, Transmission & Distribution, and Railways. In FY 2022-23, the contributions from these segments were as follows:

BHEL's primary revenue-generating segment is Power, which includes the manufacture of steam turbines, generators, and boilers for thermal power plants, as well as equipment for hydropower and nuclear power plants. In FY 2022-23, BHEL's power segment grew due to increased demand for energy and green energy initiatives.

In addition to traditional power generation, BHEL is actively expanding its capabilities in renewable energy. The company has invested significantly in solar and wind power, and as of FY 2022-23, it installed renewable capacity exceeding 3,500 MW.

The Industry segment includes serving sectors like defense, aerospace, and oil and gas. This segment has become increasingly important, contributing around 23% to the overall revenue as the company diversifies its product offerings.

Furthermore, BHEL has been strategically focusing on modernization projects, which have proven lucrative. In FY 2022-23, the company secured orders worth ₹36,100 crore, a testament to its strong order book and execution capabilities. The breakdown of order inflow by sector is as follows:

An important aspect of BHEL's revenue generation is its international business, which contributed about 20% of total sales in FY 2022-23. BHEL has a presence in over 80 countries, leveraging its technical expertise in various projects.

Lastly, BHEL's focus on cost optimization and operational efficiency has resulted in an improvement in net profit margins, which stood at 8.5% for FY 2022-23, compared to 7.1% in the previous fiscal year. This has been achieved through enhanced productivity and better project execution timelines.