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Media reports (e.g., Bloomberg) have quoted NTPC, stating that Doosan
and BHEL are the L1 and L2 bidders, respectively, for 800MWX9
boiler contracts. These were part of NTPC’s bulk tender-Phase II with a
domestic manufacturing covenant.
As per Bloomberg, Doosan’s and BHEL’s quotes are Rs16.4M/MW
and Rs18M/MW, respectively for the boiler alone. Sans Chinese
competition, we think the pricing seems to be quite decent, given the
current commodity costing. BHEL would have to match Rs16.4M to be
eligible for a part-win, in our view. Assuming Rs18M corresponded to
BHEL’s expectation of 20% OPM, 8% haircut on prices would imply a
corresponding hit on margins unless BHEL manages to negotiate better
with its component suppliers, or input costs are lower than estimated.
Likely contract values – Doosan: Rs65.6B (5 boilers) and BHEL:
Rs52.5B (4 boilers).
The turbine bids are expected to open today, and the players in the
fray include BHEL (with Siemens as technology partner), Bharat Forge-
Alstom, L&T-Mitsubishi, BGR-Hitachi, and JSW-Toshiba. With L&T
having been disqualified from the earlier Phase-I, it might have put in a
stronger bid for Phase-II, in our view.
Doosan (covered by our Korean analyst Wan Sun Park) had supplied
boilers for NTPC’s 3X660MW Sipat-1, is supplying boilers for TPWR’s
5X800MW Mundra UMPP and boilers + turbines for GMR’s 2X660MW
Chhatisgarh project. For this bulk tender, Doosan has only bid for
boilers, and have proposed a 3GW boiler mfg. plant at Haryana to meet
the covenants. With these wins, we would count Doosan as a significant
domestic competitor for BHEL and L&T.
The losing boiler bidders are L&T-Mitsubishi, Thermax-BWC and BGRHitachi
A recap of bulk tenders Phase-I (11X660MW): For turbines, Bharat
Forge JV was L1 (~Rs11mn/MW) and is eligible to win 5 units, followed
by BHEL (4 units) and JSW (2). L&T was disqualified round due to nontransfer
of technology from L&T-MHI. BHEL has already booked 2 of
the above turbine orders in FY11 and will likely book the remaining
(approx Rs17B) this year. For boilers, orders have not been firmed up
due to a legal case where GB-Ansaldo has challenged NTPC over its
disqualification. BHEL and L&T are believed to be L1 and L2.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Media reports (e.g., Bloomberg) have quoted NTPC, stating that Doosan
and BHEL are the L1 and L2 bidders, respectively, for 800MWX9
boiler contracts. These were part of NTPC’s bulk tender-Phase II with a
domestic manufacturing covenant.
As per Bloomberg, Doosan’s and BHEL’s quotes are Rs16.4M/MW
and Rs18M/MW, respectively for the boiler alone. Sans Chinese
competition, we think the pricing seems to be quite decent, given the
current commodity costing. BHEL would have to match Rs16.4M to be
eligible for a part-win, in our view. Assuming Rs18M corresponded to
BHEL’s expectation of 20% OPM, 8% haircut on prices would imply a
corresponding hit on margins unless BHEL manages to negotiate better
with its component suppliers, or input costs are lower than estimated.
Likely contract values – Doosan: Rs65.6B (5 boilers) and BHEL:
Rs52.5B (4 boilers).
The turbine bids are expected to open today, and the players in the
fray include BHEL (with Siemens as technology partner), Bharat Forge-
Alstom, L&T-Mitsubishi, BGR-Hitachi, and JSW-Toshiba. With L&T
having been disqualified from the earlier Phase-I, it might have put in a
stronger bid for Phase-II, in our view.
Doosan (covered by our Korean analyst Wan Sun Park) had supplied
boilers for NTPC’s 3X660MW Sipat-1, is supplying boilers for TPWR’s
5X800MW Mundra UMPP and boilers + turbines for GMR’s 2X660MW
Chhatisgarh project. For this bulk tender, Doosan has only bid for
boilers, and have proposed a 3GW boiler mfg. plant at Haryana to meet
the covenants. With these wins, we would count Doosan as a significant
domestic competitor for BHEL and L&T.
The losing boiler bidders are L&T-Mitsubishi, Thermax-BWC and BGRHitachi
A recap of bulk tenders Phase-I (11X660MW): For turbines, Bharat
Forge JV was L1 (~Rs11mn/MW) and is eligible to win 5 units, followed
by BHEL (4 units) and JSW (2). L&T was disqualified round due to nontransfer
of technology from L&T-MHI. BHEL has already booked 2 of
the above turbine orders in FY11 and will likely book the remaining
(approx Rs17B) this year. For boilers, orders have not been firmed up
due to a legal case where GB-Ansaldo has challenged NTPC over its
disqualification. BHEL and L&T are believed to be L1 and L2.
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