Bharat Heavy Electricals (BHEL) has announced its financial results for the third quarter of current financial year.

India’s largest power equipment manufacturer has posted a marginal 2.4 percent growth in net profit for Q3 ended December 31, 2008 on account of high raw material costs and increased wage revision.

Its net profit stood at Rs 790.56 crore against Rs 771.90 crore for the quarter ended December 31, 2007.

Mr. K Ravi Kumar, chairman and managing director of the company, said, “The marginal increase in profit is because of accomodating a wage revision of Rs 1,300 crore (40 per cent) for the current year and increased cost of raw materials in the June-August quarter.”

“Had it not been for the wage revision and the increased costs, we would have posted a 15 per cent jump in net profit,” Mr. Kumar added.

The company has announced significant rise in its quarterly total income, for the period under review (Q3). It registered a growth of 21 per cent in total income, which stood at Rs 6,328 crore as compared to Rs 5,229 crore posted during the same period last year.

It managed to increase its total turnover to 16.71% to Rs 6,453.29 crore from Rs 5,528.88 crore a year ago.

Net sales during the third quarter grew 23.87% to Rs 61,488.40 million below analysts estimates of Rs 62,645.50 million.

The company said its Q3 EPS rose 2.41% to Rs 16.15 per share during the quarter.

Moreover, the company’s directors have declared an interim dividend of 90%.

During the third quarter, the company has posted substantial improvement in order book, which stood Rs 113,500 crore.

BHEL has become world’s only supplier for 420 kN and 320 kN porcelain disc insulators for application in + 800 kV high voltage direct current (HVDC) transmission lines. After thorough R&D efforts, the company has successfully designed, developed and tested these insulators at STRI, Ludvika, Sweden, the only internationally accredited laboratory equipped for testing of such insulators in the world.

BHEL, which has a current manufacturing capacity of about 10,000 Mw, plans to increase it up to 15,000 MW by the end of the current plan period.

The company’s shares, on Thursday (Jan 29), declined 2.7% at Rs 1,355.70 on the Bombay Stock Exchange (BSE).