New Delhi: Bharat Heavy Electricals Limited (BHEL), a leading public sector engineering and manufacturing enterprise, has signed a Memorandum of Understanding (MoU) with the Ministry of Heavy Industries for the financial year 2025–26. The MoU outlines key performance targets, financial benchmarks, and compliance parameters for the year and is aligned with the Department of Public Enterprises (DPE) framework for evaluating Central Public Sector Enterprises (CPSEs).
Financial and Operational Targets
Under the MoU, BHEL has committed to achieving a value of production of ₹33,700 crore for FY 2025–26. The company has also set a capital expenditure target of ₹234 crore to strengthen manufacturing capabilities and infrastructure.
Exports and income from overseas operations are targeted at ₹600 crore, while the company aims to reduce import consumption by 10 per cent compared to the previous year, measured as a percentage of revenue from operations.
In terms of profitability and efficiency, the MoU specifies the following benchmarks:
- EBITDA margin: 9.91% of total income
- Return on Net Worth: 7.48%
- Asset Turnover Ratio: 52.86%
BHEL has also committed to ensuring 100 per cent total return to shareholders, which will be evaluated at the end of the financial year as per MoU guidelines.
Emphasis on R&D, MSMEs, and Digital Procurement
The MoU places strong emphasis on innovation, inclusive growth, and digitalisation. BHEL plans to invest 55 per cent of its current year Profit Before Tax (PBT) on research and development, including new initiatives to foster innovation.
Procurement through the Government e-Marketplace (GeM) is targeted at 37 per cent of total procurement, while trade receivables are to be maintained within 90 days of revenue from operations.
The agreement also mandates compliance with MSME procurement norms, including:
- 25 per cent procurement from MSEs
- 4 per cent from SC/ST-owned MSEs
- 3 per cent from women-owned MSEs
Governance, CSR, and Compliance Parameters
Part-II of the MoU outlines compliance requirements relating to corporate governance, CSR expenditure, timely payments to MSMEs under the MSMED Act, onboarding on TReDS platforms, leadership development, workplace health and safety, and monetisation of surplus non-core assets.
The MoU emphasises accountability, stating that failure to comply with these parameters will result in full deduction of assigned marks, reinforcing transparency in CPSE operations.
Performance Evaluation Framework
BHEL’s performance will be evaluated using a weighted scoring system totaling 100 marks, with proportional marking for achievements between 50 per cent and 100 per cent of targets. Targets based on estimates may be revised by the DPE after receipt of audited figures.
The MoU was digitally generated via the MoU Dashboard and signed by the CMD/MD of BHEL and the Secretary, Ministry of Heavy Industries.
About BHEL
Bharat Heavy Electricals Limited (BHEL) is a Maharatna public sector undertaking under the Ministry of Heavy Industries, Government of India. The company is a leading player in power generation equipment, transmission, industrial systems, and engineering solutions, with a strong presence across India and overseas. BHEL is recognised for its technological excellence, manufacturing capabilities, and contribution to India’s infrastructure development.
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