BHEL's fortunes revive as order book fills up on demand for coal-fired power

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Subscribe to enjoy similar stories. New Delhi: The government’s renewed focus on setting up thermal power projects in the country and a surge in demand for coal-fuelled power generation have revived the fortunes of BHEL Ltd, India’s largest power equipment manufacturer, two people familiar with the matter said.

BHEL, which struggled to get power equipment contracts for about three years before FY24, now has a full order book for boilers and engineering, procurement and construction contracts and faces a capacity constraint, they said. The state-run engineering company received orders worth about ₹52,000 crore for 9.6 gigawatts (GW) of thermal power projects in FY24, the highest ever by value for coal-based projects for the company.

The order momentum is expected to continue in FY25, with the government planning to set up 80 GW of thermal power capacity by 2032. The power sector makes for about 70% of BHEL's operations, the other major segment being industry, which caters to major equipment supplies and EPC works for industries including transportation, transmission, defence, aerospace, and captive power plants.

The company, which had not received any orders in the thermal power space for about three years starting August 2019 to September 2022, is now getting orders and enquiries even from private companies for the purchase of boiler, turbine and generator (BTG) goods, one of the two people mentioned above said. The company’s full order book, in the context of plans to set up additional thermal power plants, has raised concerns over whether BHEL’s limited capacity to manufacture boilers and other equipment will hinder the scaling up of India's thermal capacity.