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Bhel reports muted Q2FY22 operating performance

News: Bhel’s Q2FY22 revenues came in at Rs.5112.2 crore, up 38.3% YoY amid execution pick-up on a low base reaching ~75% of pre-pandemic level. EBITDA level losses reduced to Rs.29.2 crore (vs. EBITDA loss of Rs.632.5 crore in Q2FY21) YoY owing to better-than-expected execution and controlled operating expenses. Net loss came in at Rs.67.5 crore (vs. net loss of Rs.556.2 crore in Q2FY21) partly impacted by lower other income which declined by 29.4% to Rs.73.9 crore.

Views: Bhel has initiated stringent measures on cost control front to improve operational performance, working capital situation and focusing on new growth opportunities in oil & gas, contract manufacturing, transportation, Hydrogen, Railways, defence & aerospace for utilizing manufacturing facilities and to achieve diversification. However recent execution headwinds in power segment due to various issues leading to project delays and working capital stress are major near term challenges and needs to be resolved quickly to recover reduced revenue amid pandemic