Bhel’s focus on cost-cutting pays off; revival in power business holds key

Bharat Heavy Electricals Ltd’s (Bhel’s) focus on cost control and diversification into the industry segment is translating into better financial performance. While the firm reported a marginal increase in revenue of just 0.8% in the fourth quarter ended 31 March, net profit jumped 49% to ₹682.7 crore.

The company brought down its other expenses by 42%, which contributed substantially to its Ebitda (earnings before interest, tax, depreciation and amortization). Besides, the industry segment has a better margin profile than the power segment and hence an increase in Ebitda margin has been evident in the fourth quarter. Ebitda margin improved to 14.5% from 12.5% a year ago.