Bharat Heavy Electricals Ltd recorded a smart year-on-year recovery during FY13, even though its absolute performance was still way below that in recent history. According to the corporate performance highlights for FY13, released by BHEL in the first week of April, the PSU engineering firm secured total orders of Rs.31,528 crore, which was 43 per cent higher than the Rs.22,096-crore order inflow in FY12.

Talking only about power sector-related orders, BHEL had an order inflow of Rs.22,553 crore, about 62 per cent higher than Rs.13,937 crore in FY12. In physical terms, BHEL won orders for 9,627 mw worth of power equipment in FY13 that was more than twice the level of 3,934 mw recorded in FY12.

What is worth observing that the performance of FY13 is being compared to FY12 that was a disastrous year for BHEL. The Rs.22,096 crore worth of total orders (out of which Rs.13,397 crore related to the power sector) received in FY12 was the lowest in recent history. According to a compilation made by Electrical Monitor, BHEL performed remarkably well during the three fiscal years ending FY11. During this period, the average order inflow was around Rs.60,000 crore out of which power sector orders were Rs.44,259 crore. In physical terms, average orders in the power sector translated to around 16,200 mw per year.

The waning of BHEL’s order inflow reflects both the sharp decline in the pace of implementation of power projects – both in private and public sector – and also the growing competition in the power equipment space. Thermal power projects are coping with delays arising from absence of coal linkages and tardy environment-related clearances.

BHEL's power sector order inflows
	MW	Rs.crore	% share*
2008-09	17,020	44,407	74.4
2009-10	16,489	41,976	71.1
2010-11	15,071	46,393	76.7
2011-12	3,934	13,937	63.1
2012-13	9,627	22,553	71.5
*share in total orders

Competition to BHEL is seen coming from a new crop of power equipment suppliers, apart from the traditional rival China. Over the past two years, nearly half of dozen joint ventures have been formed between Indian and foreign companies for the supply of supercritical power equipment. Some prominent partnerships include L&T-Mitsubishi, Bharat Forge-Alstom, JSW-Toshiba, BGR Energy-Hitachi and Thermax-Babcock. When it comes to China, the feverish pace at which Indian IPPs ordered Chinese equipment has certainly abated. The mad rush for Chinese equipment was at its peak between FY07 and FY09. From FY10 onwards, IPPs have been seen

Rreturning to BHEL's after perhaps an unpleasant experience with Chinese equipment. It is worth mentioning that in FY10, private sector accounted for as much as 80 per cent of BHEL’s order inflow in the power sector.

The phenomenon of sourcing power equipment from China is no longer the scramble seen in the past but a more formalized approach. Leading IPPs like Reliance Power, Sterlite (Vedanta) and Adani Power are known to be reliant on Chinese suppliers. However, the imports are made from reputed Chinese suppliers and in some cases, it is under long-term formal cooperation agreements. Returning to BHEL’s performance in FY13, it can be noted that the power sector had a significantly higher share of 71.5 per cent in the total orders, as against 63.1 per cent in FY12. BHEL continued to gain market share in the supercritical power equipment space. It won orders for nine boilers (steam generators or SG) and eight turbine generators (TG) during FY13. Orders were received for both 660-mw and 800-mw ratings. BHEL has been rather successful in getting orders for supercritical equipment from both private and public sector entities. Its success in the recent NTPC’s mega tender has also been respectable.

Around two years ago, NTPC initiated the process of bulk procurement of supercritical power equipment totaling 11 sets of SG and TG of 660-mw each and 9 sets of SG and TG of 800-mw. While NTPC did not respond to telephonic and email requests from Electrical Monitor for the final status of the tender, reliable reports suggests that BHEL has won orders for five SG sets and four TG sets of 660-mw each, and two SG and TG sets of 800-mw each. The equipment relates to the Mauda, Nabinagar and Gajmara (now relocated) projects of NTPC and the Raghunathpur (Phase II) project of Damodar Valley Corporation. While BHEL did not win any order for supercritical equipment from IPPs in FY13, state government power utilities like Orissa Power Generation and Rajasthan Rajya Vidyut Utpadan Nigam placed orders for 660-mw rated equipment.