Bharat Heavy Electricals Ltd
NSE:BHEL
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
152.25
332.7
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Bharat Heavy Electricals Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day. I'm [ Inderpal Singh ] from Bharat Heavy Electricals Limited. Welcome to BHEL Q4 FY '22 Earnings Conference Call. This call is being organized on Microsoft Teams. [Operator Instructions] Please note that this conference is being recorded. Thank you.
And now I hand over the conference to Dr. Nalin Shinghal, Chairman and Managing Director of BHEL. Over to you, Nalin.
Good evening, everyone. I am Nalin Shinghal, CMD, BHEL, and I have with me Shri Subodh Gupta, Director, Finance; and Shrimati Renuka Gera, Director, Industrial Systems and Products with Additional Charge of Director, Engineering R&D; and the other officers of the company.
A very warm welcome to all of you. As we all know, the power sector is in the midst of a major energy transition, and the country has made specific commitments in COP26 in this context. At the same time, the focus on infrastructure development coupled with sector-specific PLI schemes as well as the government's AatmaNirbhar Bharat initiative would result in continuous growth of power demand, for which the country is looking towards a sustainable energy mix comprising of renewables coupled with hydro, nuclear as well as clean coal.
While this is likely to result in substantial opportunities in the hydro and nuclear sectors, at the same time, in view of India's huge coal reserves and lack of oil and gas reserves, coal is expected to remain the primary energy driver with emphasis shifting towards clean coal. We are already witnessing a rebound in the thermal sector with a visible pipeline of over 7,700 megawatt of coal-based power plants.
Your company is capitalizing on these emerging opportunities with a two-pronged strategy focusing firstly on indigenous development of clean coal technologies such as coal to chemical, especially coal gasification, providing comprehensive solutions for emission control; development of lower rating supercritical plants; and secondly, on growth in noncoal business, including nuclear, hydro, railways, defense and aerospace amongst others.
BHEL's focus on nuclear and hydro sectors has resulted in strong order booking in these areas in the recent years, and we have maintained market leadership and are further expanding our available offerings.
In fact, in the last financial year, under the fleet mode procurement by NPCIL, the company has received the largest ever order for EPC of Turbine Island Package for 6 units of 700 MWe pressurized heavy water reactors from NPCIL. In addition to this, orders for supply of reactor header assemblies as well as for steam generators have also been received in fleet mode. I'm proud to say that BHEL continues to remain the sole Indian company to supply nuclear turbine generators.
Your company is also making efforts to enter into the strategic partnerships with global OEMs to leverage the upcoming opportunities in areas of rail transportation, defense and aerospace and new energy sources. This has resulted in BHEL securing an order for 16 sets of 3-phase IGBT-based propulsion systems for Vande Bharat Express Trains from ICF Chennai, amidst highly competitive bidding, marking its entry into domestic semi-high-speed mobility segment.
In FY '21/'22, BHEL has booked orders worth INR 23,693 crores. With this, the total order book as on 31st March 2022 stands at INR 102,542 crores, out of which power sector is INR 85,664 crores, industry sector is INR 11,836 crores, and export projects account for INR 5,042 crores.
During the year, the Power segment has booked orders worth INR 17,931 crores. Major orders received in the Power segment include nuclear orders mentioned earlier and orders for flue gas desulfurization packages amongst others. Orders worth INR 5,660 crores were booked by the Industry segment during the year. Prominent orders during the year include supply of upgraded SRGM, the main gun on Indian warships, for which BHEL is the sole supplier, strategic equipment for the Ministry of Defense as well as propulsion systems for Vande Bharat trains mentioned earlier amongst others.
Your company continues its focus on speeding up project execution, improving service and quality standards, reducing material costs as well as indigenous technology development. Important milestones were achieved in project execution during the year, including successful commissioning of the 800 kV, 6,000-megawatt UHVDC link between the Western region grid and the Southern region grid.
During the year, BHEL has commissioned and synchronized 4,119 megawatt of power plants in the utility, solar and captive segments and an additional 1,460 megawatt of steam generators. The company has also commissioned its first FGD plant at NTPC Dadri and the country's largest air-cooled condenser at North Karanpura. This air-cooled condenser was commissioned by BHEL engineers in the absence of OEM support due to geopolitical situation, thus demonstrating the engineering prowess of team BHEL. We are in the final stages of commissioning of the 100-megawatt floating solar power plant at NTPC Ramagundam, by far, the largest floating solar power plant in the country.
With this, I'm happy to say that 2/3 of the total floating solar capacity in the country is installed and commissioned by BHEL. Strengthening technology base in existing and new areas remains a top priority. During the year, BHEL indigenously designed, installed and demonstrated a 0.25 TPD coal-to-methanol technology demonstration plant using high ash Indian coal, the first of its kind technology demonstration.
We are now working further on commercializing this technology to contribute to the national coal gasification mission of the Government of India. This fulfills the twin objective of clean coal and indigenously manufacturing many chemicals presently imported by the country.
Coming to the financials of the company in the last financial year. The company has made strenuous efforts during the last financial year, which enabled us to not only break even during FY '21/'22 but also strengthen our balance sheet. This breakeven was achieved despite the second COVID wave impacting our operations in Q1 of FY '21/'22.
The total revenue from operations of FY '21/'22 is INR 21,211 crores, which is 24% higher than the corresponding figure of INR 17,308 crores in FY 2021. The profit before tax is INR 437 crores for FY '21/'22 against a loss of INR 3,612 crores in the corresponding period of the previous year. Overall, the company achieved an EBITDA of INR 1,100 crores despite the significant pressure on margins due to sharp spike in metal prices and increase in other material and fuel costs.
The significant cost reduction drive in the company against manufacturing, administrative, sales and distribution expenses in the year resulted in such expenses being contained at [ 7% ] of turnover compared to 9% in the previous year.
Profit after tax stands at INR 410 crores against a loss of INR 2,717 crores in the previous year. This is significantly aided by efforts in taxation area, which resulted in refunds of INR 667 crores.
For the quarter 4 of FY '21/'22, the company recorded total revenue from operations at INR 7,600 crores, up by 13% compared to INR 6,752 crores in the corresponding period of the previous year.
Profit before tax for Q4 of FY '21/'22 is INR 1,098 crores compared to a loss of INR 1,385 crores in the corresponding period of the previous year.
Profit after tax for Q4 FY '21/'22 is INR 99 crores -- INR 909 crores compared to a loss of INR 1,033 crores in the corresponding period in the previous year.
The company achieved an EBITDA of INR 1,280 crores in Q4 of FY '21/'22. The persistent efforts to reduce costs resulted in manufacturing, administrative, sales and distribution expenses in Q4 to be restricted to 5.5% as compared to 7% in the corresponding period in the previous year.
Traditionally, the company has seen higher investments in working capital with higher revenues. However, the current financial year, working capital of INR 586 crores have been released despite revenues rising by 24%. Overall, there is a net positive cash generation of INR 660 crores from operations as against INR 560 crores in the last year.
The company has cash and bank balances net of borrowings of INR 2,409 crores as compared to INR 1,686 crores at the end of FY '21/'22 -- sorry, at the end of FY 2021.
Trade receivables are at INR 33,169 crores, which are only marginally higher than March '21 levels of INR 31,292 crores despite revenues rising by 24%. The trade receivables at INR 6,229 crores are the lowest in the last 10 years.
Thank you all once again for joining this conference call. We will take questions now.
[Operator Instructions] The first question is from Mohit Kumar, DAM Capital. [Operator Instructions]
Congratulations on the company's [indiscernible]. Sir, my question [indiscernible] other expenses in the quarter? What was the one-off?
You are not audible. Can you please check your mic?
Am I audible now?
Better now, yes.
My question is why the other expenses are negative in the quarter? What was the one-off?
Which was negative? You were saying something?
The other expenses are negative because of the provision effect, the provisions of minus [ 840 ]. Do you want the breakup of other expenses?
Yes, sir. Can you give the breakup?
Okay. Yogesh?
For Q4, total other expenses are minus 385 with the breakup of INR 423 crores of other expenses of manufacturing, administrative, selling and distribution expenses. Provisions are minus 842. Power and fuel cost is INR 125 crores, and there is ERV gain of INR 91 crores.
My second question is on the FGD offering. So are we expecting the FGD offerings to pump up in FY '22 given [indiscernible] FY '22?
Yes, it [indiscernible] it will pick up in FY '23.
Yes, we should expect it to pick up because at the moment, the state and the private sector ordering has not yet happened, and there are deadlines there. So I think that should pick up.
But are you seeing the signs of the ordering picking up materially? In the sense, can we take around 20, 30 gig of FGD ordering in FY '23?
That our ED Marketing will answer that.
FGD, as rightly said by CMD that most of the orders for the central sector have already been finalized. If I talk about 167,000 megawatt was identified by CEA for FGD installations. Out of that, approximately 110 gigawatt, that is 110,000 megawatt of the sets have already been finalized. And we have a market share of 30%, but there might feel -- going forward, we might feel a dampener there because now the government, even the Ministry of Power is also thinking the 2 years extension they are asking. We have given some time limits there with our latest norms.
Ultimately, the pressure on the norms is likely -- but no, the visibility is not yet there, but we are expecting the visibility to happen. It is not yet -- if you want to know whether specifically orders that have come out, that has not yet happened. But given our commitment, that is bound to happen in the near future.
Thirdly, on the thermal power ordering, BTG ordering, are you seeing any signs of recovery? In fact, recently NTPC says that they are trying to revive at least 6 gigawatt of new ordering, specially, Lara, Talcher, Darlipali and Singrauli?
So as I -- sorry, please go on.
So are the tenders out? Talcher was supposed to get finalized, right? And have you seen any of the tender in the market, which is -- or let's say inquiry from the SEB and NTPC and likes of NTPC?
So as I already said, we are seeing a pipeline of almost 7,700 megawatt because Talcher, Talabira, Adani, Bhandora, then Singrauli, Lara, all these are there. So we are expecting this ordering to happen in the near -- very near future with the crunch on the power side, power supply side, this is going to be speeded up.
Lastly, on the coal gasification. The government has this target [indiscernible] FY '30, if I am correct. Are you seeing any sort of info or looking for tender, which can materialize in the next 24 to 36 months?
Yes. In fact, in the budget, 4 plants were already announced, and we are already moving with some of the leading power -- coal and lignite producers on that front. So this is something, I think, which is going to get speeded up further.
So the next question is from Puneet Gulati, HSBC.
Can you hear me?
Yes, please go on.
Okay. Great. So my first question is, are you seeing any increase in talks towards nuclear power plant, any prospective orders that you foresee in next couple of years?
So nuclear already, the fleet mode ordering has happened. And as I mentioned, we have already received the order for 6 sets of 700 Mwe TGs, which is worth INR 10,800 crores.
Okay. Anything else that you expect in the coming year?
Not immediately because -- but yes, in the future, I think nuclear will continue to play a very strong role.
Okay. Got it. My second question is on the industrial side. Can you talk about any new JVs that you recently formed or entered new product lines?
So on the industrial side, as I already mentioned, the defense is a major area. In fact, last year's order booking has been the highest we have ever had, INR 1,500 crores, as against almost we were below INR 500 crores always before that. And in the current year, we are looking at that going up further. So that's a very major focus area, and I think the existing geopolitical situation has also added to the urgency to indigenize in that area.
Then, as I mentioned on the railway front, we have already got the first order for Vande Bharat, and we are again focusing to -- on that segment in a very, very big way. Other areas we are looking at is space where we are looking at some orders for tankages, et cetera. from ISRO.
Anything else you'd like to add Mrs. Gera?
I think, sir, we are looking at even having some orders on -- we joined hands with some developers in renewables also.
So I think our -- what we have done in floating solar, I think that is something we will try to build on further.
Right now, we are having, as you rightly said, 2/3 of the share of the floating -- complete floating market in India.
So going forward with our diversification initiative, we expect that to deliver results.
Okay. Good. But why not go towards module manufacturing where government is now offering PLI? Any thoughts there?
We have explored that. But at this point, I think the call is not to get into this.
Okay. Yes. No, that's fine. And any progress on the monetization of any assets? Any timeline you can share?
So there, actually, the government has now set up a separate body to handle asset monetization. So it will -- that is now going to go into a different sort of phase.
Okay. So it will now be completely dictated by government?
We have identified certain properties, but that process, you see the procedures will have to fall in place. So that -- I think we are expecting that clarity to emerge quite soon on that.
[Operator Instructions] Next question is line from Rahul Gajare, Haitong Securities.
You are able to hear me, right?
Yes, we can hear you.
Yes. Sir, I've got a couple of questions. I was not able to get the tax refund number that you said. Can you please repeat that number, please?
Which number?
Tax refund number, sir.
I'll request Director, Finance to give us that.
Tax refund. We have PBT of INR 437 crores and PAT of INR 410 crores. The effect of INR 27 crores, only tax liabilities appearing for 2 reasons. Current tax, we are seeing minus INR 77 crores. Basically, that includes the impact of refund, as CMD sir said in the opening remarks. So that refund has contributed as the additional income also in that provision part and the interest income part is also there which we'll discuss separately, but INR 77 crores basically includes INR 126 crores of tax provision, basically income for us under that head.
Yes. Let me clarify further. Basically, there are 2 components of the whole tax refund. One is the interest component, which has gone into the income. And second is the tax which we have already -- which we had earlier expensed, now book to income. So because in the tribunal, we won all this disputed tax cases prior to 2010/'11. So that refund basically we could get the last year.
So the effect of that ultimately has had to just see the gap between PBT and PAT, it's just INR 27 crores. It is because of the tax -- early tax refund, which were expensed, now taken as income in 2 heads, one in interest portion taken to other income and the tax part taken to tax expense.
Sir, my second question is on -- given that we've seen significant rise in commodities, I want to know how much of your order book has price pass-through built in?
Sorry, can you repeat that, please?
Yes. So given the way commodities have increased, I want to know how much of your total order book has a price pass-through?
Well you see the price variation clauses are largely there in many of our orders. However, maybe let us say about 50-50 with or without. But the major issue there also is that the pass-through percentage even then does get limited. So that is an impact we are facing, and we are working again on.
Actually, what CMD is telling. The impact of metal cost itself is very high. If you see the rise in the prices of scale of all the TMT steel, copper, various metal, global impact is much more higher as compared to the PVC what we get from customers. Basically, there's a limit also, there's a cap of PVC. Because of the restriction what is happening, our revenues are lower and the metal cost is going up. So that is really one added challenge and risk for the company, though various cost optimization efforts are all in the company. And we are trying to -- even we have saved a substantial amount last year also in the range of INR 600 crores, INR 700 crores, we could save for our overengineering optimization. So those things are going on.
But certainly, there was an impact. And because of that impact, you will appreciate one fact that whatever profit we have shown here, INR 437 crores as PBT, this is after taking metal cost at 72%, which is all-time high. If you see the financials of BHEL prior financials, it was already in the range of 60%. So that really further impacted us. Otherwise, things are well under control. And whatever -- we have already factored into this metal cost into our current financials also [indiscernible]
So essentially, to sum it up, that is a major concern area, and we are trying to mitigate that through engineering efforts as well as procurement efforts from both sides.
Okay. But that PVC restrictions, is there a percentage cap of 10%, 15%? Anything you can share?
You see, there is a cap also. The other issue is PVCs are largely index-based. So the index may not rise as much as, let us say, a steel price or a copper price or a cement price.
And one more thing, sir, basically, time extension request because of COVID reasons we have already submitted to customers. Once we get the time extension approved by the customer, some benefit of PVC will also happen.
Yes. But anyway, we are -- so that's the major effort -- that's a major front we are working on in the current year.
Understood. So my last question is CapEx. I remember your CapEx was planned for about 2.5 -- INR 250-odd crores for FY '23. I want to know, a, is there any change in FY '23? I mean if you can also talk about FY '24 CapEx? That is one part. And you had also indicated that if you were to get certain orders from DRDO, the CapEx will increase. So if you can throw some light on the entire CapEx for the next FY '23 and '24?
So the plan as of now is INR 231 crores for the next year. But if you're looking at specific areas, then there is -- we are already looking at -- for ISRO for tankages [indiscernible]
Sorry, you voice was cracking. I couldn’t hear you. Can you repeat the number?
I think there is a lot of interruption from somebody. Can you please mute your mic, please? I think there's the interruption coming from that side. Okay. Fine. So the CapEx for the current year is INR 231 crores for FY '23. And if you're looking at the long term, the major areas, we are already taking up a CapEx for the ISRO tankages, which will be almost INR 200-plus crores and another about INR 140-odd crores for the advanced -- or upgraded SRGMs. And in addition to that, there will be substantial CapEx required in the coal gasification side. So these are the various ones which are upcoming that we will be having going ahead.
The next question is from Mr. Atul. Mr. Atul? I think Mr. Atul from Citi.
I am Atul Tiwari from Citi Research. Just one question. On the 7,700-megawatt pipeline that is emerging, could you break it across different projects? And could you give your rough estimate of any timelines on the award or your status on the readiness or new developments?
I'll request Director, Power to answer -- respond to that.
Actually, there are certain tenders, which are already -- where bidding is in advanced stage, that is close to some 4,000 megawatt. But we are expecting some other tenders where [indiscernible] next few months. But timeline for 4,000, as I said, is already -- bidding is in advanced stage. Another 3,000 to 4,000 megawatt, we are expecting that with 1- year span, these tenders should be out.
And sir, which are these 4,000 megawatt projects, which are in the advanced stages of bidding?
Actually, there -- one is Talabira, 3 units of 800 megawatt of Neyveli Lignite Corporation in Odisha and the other one is Adani and Bhandora, there are 2 units of 800 megawatt. So these are where we are bidding is in advanced stages, and we have already [indiscernible] we are preparing for most of the other tenders, which are like Talcher. We are preparing to submit the bid, so that is another 2 units of 660 megawatt. So this is -- the current pipeline is [indiscernible].
Plus the 2, Singrauli and Lara.
Plus after that, we are expecting Singrauli, 2 units of 800 megawatt and Lara phase 2, 2 units of 800 megawatt.
Sir, you said Talabira, 3 x 800-megawatt and Adani 2 x 800, both are under bidding right? Your voice was little shakiness.
Yes. That's right, Talabira and Adani, Bhandora.
The next question is from Mr. Girish Achhipalia from Morgan Stanley.
Sorry, I joined the call a little lite. Apologies. I just wanted to understand the breakup of order book and the receivable breakup, if you can help with that and order inflow. These 3 numbers breakup please.
Order book breakup, do you want sector-wise?
Yes, sir.
The order receipt for FY '21/'22 is INR 23,693 crores; power sector is INR 17,931 crores; industry sector is INR 5,660 crores; and international operations INR 102 crores. So that makes it INR 23,693 crores.
You want the breakup of outstanding order book as well, no?
Yes. sir.
So power sector outstanding is INR 85,664 crores; industry is INR 11,836 crores; international operations, INR 5,042 crores. So combined together is INR 102,542 crores.
And if you would help with the split of receivables, sir.
If we look at the breakup of receivables in central PSU, it is 36% in central PSU, state utility 41%, private customer 14%, export 8%. Of total INR 33,168 crores -- I'm talking of INR 33,168 crores, including contract assets.
Sir, last question, this other expense split, can you provide for the full year?
Yes. For the full year, the other expenses, INR 162 crores that have been mentioned here. The other expenses of manufacturing, administration, selling and distribution are INR 1,355 crores, which was INR 1,480 crores last year. Current year, it is down INR 1,355 crores. Provisions are minus INR 1,526 crores. Power and fuel cost is INR 415 crores. and there is ERV gain of INR 82 crores.
I want to clarify 1 more thing. This number would appear to be much lower as compared to last year because last year, the company management has taken a concerted call to provide for INR 1,827 crores, NR 1,800 crores as a merit-based provisions last year. So this year, there was no requirement of creating merit-based provisions. So better withdrawals have happened this year and, because of the better withdrawals, we could basically improve the number of provisions. So that's why the number is negative.
Otherwise -- creation, otherwise, the normal -- the whatever provision creation we have done it as per the policy, in line with the policy. But there is no requirement of merit-based provision, so it has not happened. Secondly, the manufacturing expenses of INR 1,355 crores, we are talking about, I think, it is the lowest in last 20 years. The company has made a very good efforts, as CMD has said in the initial remarks, that level has come from 9% to 7% of top line despite top line going up, other expenses going down. So it's a major achievement. It's a breakthrough achievement.
So the company's focus is on -- because we know that market is competitive, so company's focus is also how to basically improve the bottom line through middle line also.
And the currently [indiscernible] run rate could continue, sir, for the following year?
Yes.
So the next question is from Mr. Ashwini Sharma.
Okay. We can go to the next participant. The next question is from Mohit Kumar, DAM Capital.
Can you give us the breakup of contract assets and trade receivable number at the end of FY '22? And what was the number at the end of FY '21?
I'll request Director of Finance to give us the details.
You just note down. The trade receivables at the end of March '22 is INR 6,229 crores, and the contract asset is INR 26,940 crores. And last year, March '21, trade receivables were INR 7,213 crores and contract assets were INR 24,079 crores. One more fact I would like to share with all the investors here, regarding the increase in contract assets that we are basically, if you look at the payment terms what we had in many of the NTPC projects, which are going on or other projects, because of that unfavorable terms, which were -- which we were usually getting in past, now we are not getting. Because of that also, there is an additional in contract asset to the tune of INR 3,600 crores. Those will be coming, but after some time. Because we cannot show under investment there in the company. So those are also reflected as contract asset. Otherwise, it's indirectly a funding for the projects from BHEL side.
Understood. Secondly on the power [indiscernible] order, are they mostly BTG or EPC orders? I'm talking about NLC Talabira, Adani, Talcher, Singrauli, Lara.
These are largely EPC orders.
So the quantum could be very high?
Other than Adani, which is a BTG, they are all EPC orders.
Lastly, sir, which are sectors you are very bullish on the order inflow for FY '23 and, let's say, for the next 24 months?
As I already mentioned, defense is a major sector where we are bullish on; and railways, these are 2 sectors we would be quite bullish on. And then, of course, on the thermal side, of course, which has been a traditional sector, there -- also there are -- we've already given the details. So some of these should certainly happen in this year. And if not this year, most of them will complete by FY '24.
Sir, one more question, which are the capabilities of building in the medium term to cater to the, let's say, medium -- to growth?
So if you're looking at -- generically, we are looking at engineering, we are looking at updating the manufacturing. But specific -- if you come to specifics, you see a very major one, which I mentioned was coal to methanol. Now that is the major capability we are looking going forward. Defense side and especially their support and service support, engineering support, those are the various other things that we are looking at at the moment.
Anything in particular looking at railway side, sir?
Yes, railways, of course, is a major area that we are working on. So as I already told you, we have got the first order for the train -- for the Vande Bharat trains. And that's a very focused segment where we have -- we are looking to move ahead. Technology tie-ups also are in the pipeline for supporting that sector.
Anything on the hydrogen side, sir?
Hydrogen is another area which we have been working on. So we have already -- as I had mentioned in our previous con call, we had set up a dedicated business group around hydrogen. We have already developed 5-kilowatt fuel cell and are looking to now upgrade that capability. And in parallel, we are in discussions with various international majors for technology tie-ups for the hydrogen -- for the electrolyzer. So the hydrogen economy is something which is going to be important going ahead.
The next question is from Mr. Amit Anwani from Prabhudas Lilladher Private Limited.
Mr. Ashwini Sharma, we are unmuting yourself. [Operator Instructions]
Our next question is from Mr. Aditya.
Mr. Abhineet Anand, you can go ahead with your questions.
I just wanted to know the terms of the contract for the new coal business plants that are coming up. I remember a few years back, they had gone very unfavorable because somewhere around 10% was to be given after the performance guarantee and all. Can you spell out what is the terms now -- I mean, in terms of payments?
I'll request Director Power to answer that question.
There have been certain contracts where we have encountered very unfavorable payment terms. But after that, we have -- in particular, we have engaged with NTPC. And for the future tenders, they have modified the terms which are quite favorable or maybe close to what traditionally it used to do. For example, we had difficult payment terms in Patratu and some FGD projects. But for the new tenders of NTPC like Talcher, the payment terms have been amended in the tender documents.
Similar terms was also -- Talabira etc. also has similar terms?
It is same, sir, more or less, like the earlier tender. Now you have that 10% and then you have some 75% on receipt of the material, but 10% will always remain as a deferred payment towards the PG test and the applied operation. That is always there. 90% of the payment will be available to us. This is what I would like to say.
So in this regard, you may also be aware that even the government has issued guidelines in October regarding payment terms to be incorporated in major tenders. So that, I think, is also going in the same direction.
So we’ll once again try last question, Mr. Amit Anwani, from Prabhudas Lilladher?
Okay. There's no other questions. With the permission of our Chairman, sir, -- can you close, sir?
Thank you. Thank you, ladies and gentlemen, for your patient hearing and in an interactive question Q&A session. Thank you very much for your interest in BHEL. Goodbye.
Ladies and gentlemen, thank you for joining us. You may now disconnect your lines.