With a cash reserve of over Rs 4,000 crore (Rs 40 billion) in hand, engineering giant Bharat Heavy Electricals Ltd on Monday said it is looking for acquisitions in India and abroad to obtain new technologies or products as part of a strategy to expand its global footprint.
"We are looking at small to medium-sized companies for inorganic growth. We have set up an internal group, which has been working on it for the past few months," BHEL chairman and managing director A K Puri told reporters during the company's annual press conference.
BHEL, which posted a 70 per cent jump in net profit at Rs 1,621 crore (Rs 16.21 billion) over a record turnover of Rs 14,410 crore (Rs 144.10 billion), would appoint consultants on a case-by-case basis for acquisitions.
Asked what could be the size of the deal, he said it would not be more than the company's present cash reserves. The company has cash reserves of over Rs 4,000 crore, a BHEL official said.
The acquisition, if any, would be in the company's line of business only and help in getting new technologies and expertise, intellectual property rights, product extensions and market access, he said.
The possible target for getting technologies and IPRs would be developed countries, while for extending market reach it would be developing countries, he said.
Puri said the company is also gearing up for taking advantage of the emerging opportunities in nuclear power sector, besides expanding conventional generation capacity to 10,000 MW by next year from 6,000 MW at present.
The compnay is also eyeing the government's plans of setting up ultra mega power plants of 4,000 MW, which would have units of 800 MW each. BHEL has a technical tie-up with French equipment supplier Alstom for supplying 800 MW super critical technology, he said.
Giving details of the financial performance during 2005-06, Puri said the company posted its highest-ever 39 per cent jump in turnover to Rs 14,410 crore from Rs 10,336 crore (Rs 103.36 billion) in 2004-05. This is the highest year-on-year growth in revenue in the past three decades, he said, adding net profit surged 70 per cent to Rs 1,621 crore from Rs 953 crore (Rs 9.53 billion) a year ago.
The company secured orders worth Rs 9,008 crore (Rs 90.08 billion) during the year gone by and the total outstanding order book has swelled to Rs 37,500 crore (Rs 375 billion) at the end of March, 2006.
More than a quarter (27 per cent) of the revenue came from exports, Puri said, adding total export turnover stood at Rs 3,875 crore (Rs 38.75 billion) in the financial year just ended.
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Discussion Group.
