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BHEL plans to step up focus on water projects

New Delhi : State-run engineering major Bharat Heavy Electricals Limited (BHEL) has bagged an order worth over Rs 64 crore for setting up six sewage treatment plants (STPs) in Raipur, Chhattisgarh even as the company said it is aiming to double the share of non-power projects, including water sector to its total business to 40 per cent in three-four years.

The Chhattisgarh order has been given to BHEL from the Raipur Development Authority. The cumulative capacity of the six STPs in Raipur would be 25.4 million litre per day (MLD).

BHEL said the scope of work includes construction, testing and commissioning of six STPs with raw sewage pumping station, treated sewage effluent pumping system, bio-filter, HT substations, transformers and control room building for PLC/SCADA based automation system, along with operation & maintenance (O&M) for a period of 10 years.

The project for construction of the decentralised STPs will be based on sequential batch reactor (SBR) technology.

BHEL is a dominant player in the water treatment business in the power as well as industrial segments and has set up several water treatment plants as well as sea water reverse osmosis (SWRO)-based desalination plants.

The company offers turnkey solutions to all segments of water management, from potable water applications to domestic sewage treatment.

The company said the Raipur STP order is part of its strategy to diversify into new areas to push up growth in non-power sectors.

The power equipment major is keen to pick up projects in the non-power segment on a turnkey basis and has plans to focus on areas like municipal water and Ganga mission in the water segment.

"Currently, our non-power business is 20 per cent and we are aiming at doubling it to 40 per cent by 2022," BHEL Director Amitabh Mathur was quoted as saying in recent news reports. "Unless, we take turnkey projects like we do in power, topline will not be high".

While power and associated businesses currently contribute about 80 per cent of the revenue for the company, with the new areas of diversification, BHEL is looking to transform itself into an engineering powerhouse.

In the water segment, BHEL is looking at wastewater treatment and municipal sewerage system projects as business generators. The company has mapped the 200-km stretch of the Ganga River from Rishikesh to Garhmukteshwar. Plans are afoot to submit proposals to set up sewerage treatment plants along the stretch, said Mathur.

The company had also tied up with National Environmental Engineering Research Institute (NEERI) for capacity building in water projects. The two had signed a MoU for jointly working on projects related to water and wastewater treatment in the municipal segment.

"We are in touch with several municipal authorities like Patna and Varanasi. We are expecting a project in this segment shortly," Mathur said.

However, the company's September quarter earnings missed analyst expectations recently. BHEL reported net profit growth of 5.9 per cent despite operational loss, aided by other income.

Net profit during the second quarter ended September 2017 rose to Rs 115.4 crore as against Rs 109 crore last year.

Revenue from operations in second quarter fell 5.8 per cent to Rs 6,168.36 crore (hit by both segments industry, power), but grew by 15.2 per cent from previous quarter, the company said.

At operational level (EBITDA), BHEL reported a loss of Rs 95 crore in second quarter as against income of Rs 155 crore last year and loss of Rs 88 crore in the previous quarter ended June 2017.

Analysts had said that the company's movement of orders from non-execution to execution category; continued constraint on execution due to operational issues; and trends in provisions, particularly for liquidated damages on project completion would be key to watch out for.

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