Abstract :

This Study, Titled A Study On Capital Budgeting At BHEL, Evaluates Segment Capital Allocation, Project Net Present Value (NPV), Annual Capital Expenditure Trajectories, Return On Capital Employed (ROCE), And Financial Feasibility Of Major Industrial Modernization Projects At Bharat Heavy Electricals Limited (BHEL). Heavy Engineering Public Sector Undertakings Face Massive Long-term Capital Commitments, Where Power Sector Equipment Represents 45% And Industrial Systems Account For 28% Of Capital Expenditure Allocations. A Five-year Project Lifecycle (2021-2025) Of An Enterprise Manufacturing Modernization Initiative At BHEL Is Evaluated Using Capital Budgeting Parameters: Net Present Value (NPV), Internal Rate Of Return (IRR), Payback Period (PBP), And Benefit-Cost Ratio (BCR). Quantitative Analysis Reveals That Boiler Plant Modernization Yields The Highest NPV At ₹185.0 Crores, Followed By Turbine Testing Facilities At ₹125.0 Crores. Scaling Annual CapEx To ₹6,500 Crores Elevates Corporate ROCE To 24.5%, Expanding On-time Project Execution Rates To 96.2% And Compressing Cost Overrun Rates To 1.1% By 2025. The Financial Model Yields A Positive NPV Of 284.5 Crores And An IRR Of 38.6%, Far Exceeding The 10% Discount Hurdle Rate. The Study Concludes That Structured Capital Budgeting Practices At BHEL Are Highly Viable, Driving Industrial Infrastructure Expansion And Shareholder Value Creation.

Published:

04-9-2026

Issue:

Vol. 26 No. 9 (2026)

Page Nos:

39-47

Section:

Articles

License:

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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