BHEL – Bharat Heavy Electricals Limited is a leading Indian engineering as well as manufacturing company. We will see the SWOT analysis of BHEL in this blog along with its other details.
About BHEL
BHEL is the leading manufacturing and engineering Company having headquarters in New Delhi. The company is regulated by the ownership ministry of not just public companies but also heavy industries. BHEL was raised in 1956 and today it has become the most significant energy as well as power generator.
In 1991, the company was transformed into a public limited company, and with the passing years, it developed a huge capacity to produce additional equipment for different sectors.
BHEL is instrumental in operating different elements like engineering designing construction testing and servicing various products. The brand has a big network of about more than 15 manufacturing units, 8 service centers, 2 maintenance units as well as 5 regional offices.
BHEL at a Glance
| Founder | The Government of India |
| Key People | K S Murthy – Chairman & Managing Director |
| Year of Establishment | 1956 |
| Annual Revenue (as of FY24) | US$2.9 billion |
| Operating income (as of FY24) | US$29 million |
| Net income (as of FY24) | US$34 million |
| Total assets | US$7.1 billion |
| Origin | New Delhi, India |
| Total no. of employees | Approx. 29826 |
Industries
- Aerospace
- Defense
- Forging
- Renewables
- Electrical equipment
- Battery manufacturing
- Nuclear power
- Rail transport
- Hydropower
- Thermal power stations
- Locomotive
Products Offered by BHEL
- Gas and Steam Turbines
- Ultra High Voltage Transformer
- Industrial Valves
- Transmission systems
- Boilers
- Electric Motors & Locomotives
- Heat Exchangers
- Controlled Shunt Reactor
- Switchgears and Sensors
- Power Electronics
- Automation and Control Systems
- Nuclear reactor
- Generators
SWOT Analysis of BHEL
The SWOT analysis is an effective tool to analyze the company’s strengths, weaknesses, opportunities, and threats in order to strategize growth.
Let’s now see the SWOT analysis of BHEL in detail.
Strengths of BHEL
The strong points of BHEL include –
Strong Research & Development
BHEL gives a strong focus on creative advancement as well as innovation in its products. The company has developed a lot of competitive products as well as services that are technically upgraded. The R&D labs of BHEL have permanent magnet machines, intelligent machine control electrical machines, High voltage engineering, Power electronics systems, and much more. This proves the strengths of BHEL.
Top quality products
The brand has implemented a Quality Manual for the complete organization including processes, tasks, systems, and much more. Moreover, second-tier documents were also implemented during this time. The company is leading in quality planning, calibration systems, and quality circles in India.
Strong engineering base
BHEL has a strong base in engineering and a very stable industrial connection. This is the biggest power generation product manufacturer that manufactures different products like electric locomotives, steam turbines, boilers, heat exchangers, sensors, transmission systems power electronics, and much more.
The company is supported greatly by the collaborators to get modern technologies and then transform them as per the Indian requirements.
Weaknesses of BHEL
The top weaknesses of BHEL include –
Incapability for innovation
BHEL has been incapable of offering credit to the suppliers and also finance, power projects, as well as soft loans. The brand also delivers products by taking more than the required time as compared to the international competitors. It is among the major weaknesses that may impact the business hugely.
Tiresome procurement & criticism
The company has a very lengthy procurement process that requires auditing. Also one of the BHEL projects in Rampal has faced a lot of criticism due to the impact of it on the environment. It is also said that the environmental effects of this project may cause the biggest harm to the largest mangrove forest across the globe.
Complex PSU status
It is another weakness for BHEL as it requires stringent rules and regulations. It is also forced to carry a large amount of labor force that the brand cannot reduce.
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Opportunities for BHEL
The major opportunities for BHEL are the following factors –
Higher demand
The power sector has a huge demand in order to produce more equipment. It is a big opportunity for BHEL to expand its footprints across the globe.
Renewing power plants
BHEL has been in the power production industry for a very long time and there are a number of plants requiring services as well as some new spare parts. This will help the company carry out faster production as well as attaching more visibility in the market.
Increased defense budget and private sector involvement
BHEL undergoes a powerful work environment and the increase in private sector participation in the distribution circles is on the peak. Moreover, there is also an increase in the defense budget with a lot of opportunity for the brand to increase its revenue.
Siemens collaboration
Siemens has a joint venture with Power Plant Performance Improvement Limited which is a beneficial collaboration offering a lot of business for BHEL.
Threats to BHEL
The major threats to BHEL include –
Severe competition
BHEL confronts a lot of competition from national as well as international players. Moreover, a lot of associations in the industry have reduced the turnover of BHEL. This is the biggest threat to the brand.
New players
The number of small contractors is increasing creating price wars. Moreover, emerging players in the market are also a major threat to the company.
Top Competitors of BHEL
The main 5 competitors of BHEL include the following –
1. Larsen & Toubro
It is the major procurement construction and engineering company that has solid competition with BHEL in infrastructure power generation and heavy engineering projects.
2. Siemens
It is a multinational company competing strongly with BHEL in the power and energy sector.
3. General Electric
It is a top player in the power generation and industrial equipment sector and is a strong computer of BHEL.
4. Tata Power
The brand competes with BHEL in the power generation segment specifically in the renewable hydro and thermal energy projects.
5. Adani Group
It is also a worldwide leader in power generation as well as other sectors like infrastructure competing with BHEL.
Conclusion
BHEL is a strong and integrated power plant equipment manufacturer which is one of the giant manufacturing and engineering establishments in India. The brand is among the top few companies across the globe that manufacture the complete types of power equipment. Today the brand can deliver more than 18,000 MW of power supplies per year. The company has an international reach going beyond its limits.
Top 10 FAQs – BHEL SWOT
1. What is the value of SWOT analysis in the case of BHEL?
BHEL engages in capital-intensive business operations such as power and infrastructure, where the time of the project is long and unpredictable. SWOT analysis can be used to learn about the way in which government support compensates for the inefficiency of operations and market competition.
2. What are BHEL’s key strengths?
BHEL is advantaged through the decades of engineering experience and good relations with the government. The complexity of its turnkey projects can be performed because of its enormous manufacturing base.
3. What are the weaknesses of BHEL?
Sluggish project completion affects the cash flow and profitability. Overreliance on the orders of the public sector constrained the flexibility.
4. What are the opportunities facing BHEL?
Renewable energy, rail electrification, and defense production present good diversification opportunities. There is an infrastructure drive in India that favors order inflow in the future.
5. What threats does BHEL face?
There is pressure on prices due to the activities of the international competitors and the private EPC players. Budget limitations and policy changes also have an impact on project pipelines.
6. The benefits of government ownership to BHEL?
Large infrastructure bids are better supported by the government. It is also stable in times of economic slowdown.
7. Will the Indian market be relied on by BHEL?
Yes, the domestic projects are the major source of revenue. Foreign operations are still constrained.
8. What is the impact of diversification on the SWOT of BHEL?
The renewables and transport business ventures lessen reliance on thermal power. Nevertheless, the ability to execute is important.
9. Is it possible that SWOT analysis can be used to analyze BHEL by investors?
Yes, it emphasizes turnaround potential and structural challenges. Investors employ it to examine the prospects of recovery on a long-term basis.
10. Is the SWOT of BHEL variable with time?
Yes, there are changes in infrastructure policies and in energy trends. It is critical to conduct a consistent strategic review.
