The Hindu : Business : BEML pre-tax profit to go up by 11 p.c. to Rs. 350 cr.

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BEML pre-tax profit to go up by 11 p.c. to Rs. 350 cr.

Special Correspondent

The demand for mining equipment is likely to touch $15b, according to a study

Exports more than doubled to Rs. 253 crore
Indonesia, Australia, the focus markets

BANGALORE: Mini ratna BEML (formerly Bharat Earth Movers Ltd.) recorded a turnover of Rs. 3,005 crore in 2007-08, an increase of 15.5 per cent over the previous financial year.

Releasing the provisional results for the last financial year, Chairman and Managing Director V. R. S. Natarajan announced that the pre-tax profit of the company was likely to increase by 11 per cent to Rs. 350 crore.

Although the company is under the charge of the Defence Ministry, producing equipment for the armed forces, its sales of hardware for the military increased only marginally to Rs. 770 crore from Rs. 743 crore, an increase of less than four per cent. In contrast, its mining and construction equipment business has been the mainstay. This division’s turnover increased by 10 per cent to Rs. 1,797 crore from Rs. 1,639 crore.

Mr. Natarajan said the projected increase in coal production from the current level of about 415 million tonnes to about 700 mt by the end of the XI Plan, offered “great opportunities for BEML.” He referred to a study by McKinsey, which had projected that the demand for mining equipment in India is likely to touch $15 billion, compared to the current level of $2.3 billion. He said “the emphasis is going to be on MoU-based sales, rather than through tender-based sales, the traditional channel for sales in India.”

The company’s exports last year amounted to Rs. 253 crore, registering an increase of more than 130 per cent over the previous year. Mr. Natarajan said Indonesia and Australia were “focus markets” for the company.

BEML is also eyeing the market for cars for metropolitan transport systems in Mumbai, Bangalore, Hyderabad and other Indian cities. Last year, the company bagged an order for the supply of 192 standard gauge cars for the Delhi Metro Rail Corporation. The company had an order book worth almost Rs. 3,800 crore at the end of the last financial year.

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