Bhel found ready takers today as its voluminous order book was further bloated by a huge deal from IOC last week.

The scrip of the power equipment maker surged to its new 52-week high of Rs 272.20 today. But it did not hold on to that high and eased to Rs 271 by 10:55 IST, though still higher than yesterday's close by 2.42%.

The market (including FIIs) has generally been upbeat about the scrip of late. The scrip of the state-run electrical equipment maker has now risen a solid 88% in seven months from its 52-week low of Rs 144 on 1 November 2002.

Bhel's strong book order position has impressed the market. In fact, there seems a ceaseless flow of orders for the company.

On Friday, the company bagged a contract for setting up a 120-MW captive power plant at Indian Oil Corporation (IOC)'s Panipat Refinery. The order is the largest-value single order ever secured by Bhel's industry sector business segment, according to the company. The contract from IOC is worth Rs 722 crore.

Bhel will set up the integrated power plant on turnkey basis, which has been accorded by IOC as part of its refinery expansion and petrochemicals project at Panipat. Engineers India (EIL) is the engineering and project management consultant for this project. The project will be commissioned in 24 months. Bhel will cover aspects like design, engineering, manufacture, supply, installation, erection, testing and commissioning of the power plant on total turnkey basis.

Earlier, there were reports that the company expects a double-digit growth in the current financial year. To vindicate those expectations is the fact that the company has orders worth Rs 16,000 crore on its books. Of these, 70% was received in the previous financial year.

The company recently announced its decision to diversify into power distribution and generation. This forward integration move is aimed at ensuring steady cash inflows.

The diversification should eventually garner for Bhel revenues up to 30-35% of total revenues. The company has said that funds for the diversification were no constraint.

The recent Electricity Bill has paved the way for the company's foray into power generation and distribution, hitherto a daunting area of operations as electricity generated was needed to be sold to loss-making state electricity boards (SEBs) which did not have the resources to make timely payments for power purchased.

The bill aims at improving the health of SEBs and putting the power sector on a viable and sustainable growth track. This, in turn, will help Bhel improve its financials, especially as it receives 60% of its revenues from SEBs. Incidentally, the dues from electricity boards have already dropped from Rs 1,400 crore to Rs 850 crore during FY 2002-03.

For Q4 ended 31 March 2003, the company recorded a 2.6% rise in net profit to Rs 376.10 crore (Rs 366.54 crore) on a 3% increase in total income to Rs 3,260.84 crore (Rs 3,166.81 crore). For the year ended 31 March 2003, the company's net profit stood at Rs 517.06 crore (Rs 467.95 crore) on total income of Rs 7,206.56 crore (Rs 7,066.41 crore).

Bhel is the largest engineering and manufacturing enterprise of its kind in India, and a leading international company in the field of power equipment manufacture. The Centre has decided to sell 17% equity stake in Bhel to bring down its holding to 51% from 67.7%.