With elevated receivables, it is a weary road to recovery for BHEL

June quarter earnings of Bharat Heavy Engineering Ltd (BHEL) were disappointing. Reacting to it, the stock opened Monday’s session in the red at ₹36.65, down more than a percent on the NSE.

The state-run company’s consolidated net loss widened to ₹893.14 crore in the June quarter from net loss of ₹218.93 crore in the same quarter last year. BHEL’s performance was impacted by weak execution. Also, with total debtors at ₹36,000 crore, the overhang of pending receivables remains.

In a post earnings conference call, its management said, from the total receivables, around 12% are from the private sector, 48% from state entities, 33% from the Center, and 7% pertain to the international markets. According to analysts, in spite of the company’s ongoing efforts, its receivables position is likely to remain elevated in the near future.