Bharat Heavy Electrical Ltd's (BHEL) issuer rating was placed under negative watch by India Ratings, the agency said in a press release on Wednesday. The negative watch was triggered due to the decline in the company's key business parameters.
The state-owned company saw its revenue fall by 47 percent over the last three financial years, according to the credit ratings agency's release. Provisional figures for FY16 also suggested a 15 percent year-on-year decline in revenue to Rs 25,100 crore. India Ratings attributes the decline in revenue to lower order intake over FY12-FY15 as well as the presence of slow-moving projects worth nearly Rs 50,000 crore in its order book as at FY16.
BHEL's earnings before interest, taxes, depreciation and amortisation (EBITDA) margin also faced serious contraction, as reflected in the provisional FY16 figures, the agency said. The company had a cash balance of Rs 10,000 crore at the end of FY16.
India Ratings expects to resolve the negative watch in July 2016, when BHEL's ratings will be either downgraded or affirmed.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
