How did BHEL manage to turn around into a profit in the Dec-20 quarter?

It is actually the other way round. Bharat Heavy Electricals Limited or BHEL posted a net loss of Rs.217 crore for the quarter ended in Dec-20. In fact, BHEL had reported a consolidated net profit of Rs.163 crore for the Dec-19 quarter. The fall in profits was largely driven by a fall in revenues by 21.6% to Rs.4,452 crore in the Dec-20 quarter as compared to a revenue of Rs.5681 crore in the Dec-19 quarter.

Due to the sharply lower top line, the fixed costs of the company were not adequately absorbed and that led to the firm's EBITDA loss touching a level of Rs.181; a steep fall from a level of Rs.327 crore in the Dec-19 quarter. Needless to say, the operational and financial results have been adversely affected by the pandemic, as has been the case with most of the heavy equipment companies.

It may be recollected that BHEL had recently commissioned the second unit of its 1600 MW Gadarwara thermal power project in Narsinghpur district in the state of Madhya Pradesh. The project was installed on behalf of NTPC and from here on it will be developed by NTPC Ltd. The first unit of 800 MW of this project was also commissioned by BHEL in the year 2019.

Originally conceived as a fully government owned company, the company has been through very tough times after peaking out around 2007 and the stock prices have corrected sharply. BHEL is India’s largest manufacturer of power generating equipment and it boasts of an installed base of over 190,000 MW of power equipment on a global basis.