|
Summary of Contents
SHAREKHAN SPECIAL
Q4FY2007 Capital Goods earnings
preview
The Working Group
on Power for the 11th Five-Year Plan has envisaged an addition of
around 69,000 megawatt (MW) of power generation capacity during the
plan period (FY2007-12) and an additional capacity of 86,500MW
during the 12th Five-Year Plan. Looking at the current status of the
10th Five-Year Plan's (FY2002-07) capacity addition programme, these
targets looks quite aggressive since the government had planned a
capacity addition of 41,110MW during the 10th Plan period whereas
the actual achievement is likely to be around 25,000MW (only 61% of
the target). Out of this about 17,995MW of capacity had already been
commissioned till December 31, 2006. However the fact that a total
of 31,345MW of capacity is already under construction gives the
panel's plan a lot of credibility.
Looking at the huge power
generation capacity addition programme of the government (totaling
to around 155,000MW in the next ten years), the order flow momentum
for the capital goods companies engaged in the power sector, such as
Bharat Heavy Electricals Ltd (BHEL), Crompton Greaves, Bharat
Bijlee, Indo Tech Transformers, KEI Industries and Genus Overseas,
is expected to be robust. Going by the recently announced
provisional results of BHEL, wherein its order flow for the full
year ended March 2007 registered an increase of 88% to Rs35,633
crore and the order backlog stood at an all-time high of Rs55,000
crore, the time ahead for power ancillary companies appears even
more
promising. |
