HEC records net loss of Rs 250 Crore in nine months, faces challenges in achieving targets

Ranchi: Heavy Engineering Corporation Limited (HEC) is grappling with escalating losses, marking a net loss of approximately Rs 250 crore over the first three quarters of the current financial year, 2023-24. Despite the passing of three quarters, the company has been unable to meet its targets, particularly in securing work orders as outlined in the Memorandum of Understanding (MOU).

The MOU set an ambitious target for HEC to secure work orders worth Rs 350 crore from April to December. However, the company has fallen significantly short of achieving this objective, resulting in substantial financial losses. In December 2023 alone, HEC incurred a net loss of Rs 21.95 crore, following a trend from the previous month when the net loss was Rs 20.20 crore.
HEC faced challenges in achieving its targets for work orders in the first and second quarters, and the situation persisted in the third quarter, despite a set target of Rs 230 crore. The company’s inability to secure work orders has led to a financial crisis, impacting both permanent and temporary employees who have not received salaries for the last 18 months. Additionally, production has come to a standstill in all three factories of the company.

The financial figures for December 2023 indicate a turnover of Rs 16.96 crore, which is approximately 75 percent less than the MOU target. The company’s production also fell by 65 percent compared to the MOU target. HEC produced Rs 23 crore in December, a significant drop from the Rs 12 crore produced in November. The company suffered a loss of only Rs 14 crore in December, indicating a challenging financial situation.

Despite setting an annual target of securing work orders worth Rs 650 crore for the financial year 2023-24, HEC has faced difficulties in achieving its quarterly targets. The closure of work in the company has prompted potential clients to choose alternative options, exacerbating the challenges for HEC in securing work orders and meeting its financial goals. This situation raises concerns about the company’s overall viability and its ability to overcome the current financial crisis.