NEW DELHI: Bharat Heavy Electricals Ltd, India's biggest power equipment maker, plans to double exports as expansions by rivals such as Larsen & Toubro and Toshiba threaten a supply glut in its main market.

The state-run company wants overseas sales to account for 15% of revenue by 2012 and is targeting orders from Central Asia, Africa, the Middle East and the Indian subcontinent, Chairman B. Prasada Rao said in an interview.

"Manufacturing capacity could be a little more than what the market requires" in a few years, Rao, 56, said in his office at the company's headquarters in New Delhi yesterday. "There will be pressure on companies to play well."

India's plan to almost double electricity generation by 2017 has prompted Bharat Heavy to add capacity and attracted investments in equipment manufacturing from companies including Larsen, Toshiba and Alstom SA. Bharat Heavy's sales growth has slowed for three straight quarters and has lagged behind the company's target of a 25% annual increase.

"The company clearly won't like to have all its eggs in one basket," Shruti Udeshi, an analyst with Finquest Securities Pvt., said by telephone from Mumbai. Bharat Heavy "will witness competition in the Indian market with new capacity coming up in the next couple of years."

Shares of Bharat Heavy have risen 68% in the past year compared with the 67% increase in the benchmark Sensitive Index. The stock rose 0.2% to close at 2,332.15 rupees in Mumbai yesterday.

Orders in Hand

Exports currently account for 8% of the company's sales, Rao said. That compares with a 6.4% share in the financial year ended March 2009, according to data compiled by Bloomberg.

The equipment maker said Feb. 8 it won an order to supply a hydroelectric plant to Bhutan, its biggest for generators that produce electricity from water. Bharat Heavy has in hand orders worth 1.34 trillion rupees ($28.6 billion) to supply equipment over the next three years.

The New Delhi-based company is doubling its annual capacity to produce equipment capable of generating 20,000 megawatts by 2012. That compares with 23,763 megawatts of plants that started in the last three years. One megawatt is enough to power about 200 middle-class Indian homes.

Toshiba, Japan's largest supplier of nuclear reactors, plans to sell $400 million worth of power-generation equipment in India by 2015 in a joint venture with JSW Group. The venture plans to produce steam turbines and generators ranging in size from 500 megawatts to 1,000 megawatts, the two companies said in a Feb. 1 statement.

Alstom Ventures

Paris-based Alstom and its units won government approval last month to form two joint ventures with Bharat Forge Ltd. to manufacture power plant equipment and invest 70.5 million euros ($98 million).

Mumbai-based Larsen expects to start producing equipment capable of generating 4,000 megawatts of electricity from this year, according to a company spokesman, who declined to be named because of internal rules.

Indian utilities plan to add 78,700 megawatts of generation capacity in the five years to March 2012 and 100,000 megawatts in the following five, according to the country's Power Ministry.

Power producers have placed orders for more than half of the projects planned in the five years ending March 2017, according to Rakesh Nath, chairman of the Central Electricity Authority, the country's utilities regulator.

Bharat Heavy and Larsen also face competition from Chinese equipment makers such as Shanghai Electric Group Co. and Dongfang Electric Co. Shanghai Electric is supplying generators to three power projects being built by Reliance Power Ltd., controlled by billionaire Anil Ambani, the third-richest Indian.