Bharat Heavy Electricals has registered 1% growth in its sales for the quarter ended March 2019 to Rs 10297.16 crore. However an 80 bps expansion in operating profit margin resulted in 8% growth in operating profit to Rs 1395.23 crore. With other income stand lower by 12% to Rs 120.87 crore, the PBIDT was up by 6% to Rs 1516.10 crore. Even as interest costs (as % of OP) stand higher, the PBT was up by 13% to Rs 1285.43 crore, gained largely by lower depreciation (as % of OP). With taxation stand lower by 12% to Rs 602.73 crore, the growth at PAT jumped up by 49% to Rs 682.70 crore. Eventually the net profit (total comprehensive income) was up by 6% to Rs 566.45 crore hit by higher other comprehensive expense which was Rs 116.25 crore, a swing of Rs 191.55 crore from an income of Rs 75.30 crore in the corresponding previous period.

• Operating income excluding other operating income was flat (up 0%) to Rs 9836.50 crore. But value of production was up by 4% to Rs 9793.70 crore. Sale for the quarter and corresponding previous period was 100.4% and 104.4% of its respective value of production. Sales higher than value of production reflects liquidation of earlier period inventory.

• Flat growth in revenue is largely due to growth in revenue of industry segment. Segment revenue of power was down by modest 3% to Rs 8103.38 crore. That of industry was up by strong 14% to Rs 1733.12 crore.

• PBIT was up by 61% to Rs 1559.99 crore driven by strong growth in segment profit of both the segments. Despite marginal lower sales, the segment profit of power was up by 44% (to Rs 1306.58 crore) gained by sharp 520 bps expansion in segment margin to 16.1%. And the segment profit of Industry was up by 343% to Rs 253.41 crore driven largely by higher sales and 1090 bps expansion in segment margin to 14.6%.

• OPM expanded by 80 bps to 13.5% and that was largely as the impact of higher material cost was more than offset by lower staff and OE. Material cost as proportion to sales net of stocks was up by 840 bps to 56.5%. But the staff cost was lower by 10 bps to 19.3%. And the OE was down by 880 bps to 10.5%.

• Other income was down by 12% to Rs 120.87 crore. The interest cost was up by 33% (to Rs 96.44 crore) and the depreciation was down by 38% (to Rs 134.23 crore). Thus, the PBT was up by 13% to Rs 1285.43 crore.

• EO income for the quarter and corresponding previous period was nil. The taxation was down by 38% to Rs 134.23 crore. Thus gained by lower tax provision, the growth at PAT was 49% (to Rs 682.70 crore).

Yearly performance

Standalone sales were higher by 5% to Rs 30348.95 crore. Further with OPM expand by 40 bps to 7.1%, the operating profit leaped by 11% to Rs 2141.96 crore. After accounting for lower (down 2%) other income, higher interest (as % of OP) and lower depreciation (as % of OP), the PBT was up by 30% to Rs 2057.86 crore. Taxation was up by 8% to Rs 842.47 crore and thus the growth at PAT was up by 51% to Rs 1215.39 crore. PPA was nil for the quarter as well as corresponding previous period. Thus the PAT after PPA was up by 51% to Rs 1215.39 crore. The other comprehensive expense was Rs 119.18 crore compared to an income of Rs 83.33 crore in corresponding previous period. And thus the total comprehensive income was up by 23% to Rs 1096.21 crore. The impact on depreciation due to review and revision in the estimated useful life of certain item of PPE in FY 2018-19 is reduction of Rs 201.42 crore.

Consolidated sales was up by 5% to Rs 30367.65 crore and the operating profit was up by 9% to Rs 2137.93 crore gained by higher sales and 20 bps expansion in OPM. Eventually the net profit (total comprehensive income attributable to owner) was up by 70% to Rs 892.69 crore.

Other developments

The Company has completed the buyback of 189336645 shares in January 2019. Post Buy back, the Share Capital of the Company stands at Rs 696.41 crore.

To pay a final dividend of Rs 1.20 per share of Rs 2 face value for 2018-19 and this is in addition to interim dividend of Rs. 0.80 per share (Face value Rs 2 per share) already paid.

Bharat Heavy Electricals: Results

Bharat Heavy Electricals: Segment Results

 Bharat Heavy Electricals: Consolidated Results