Bharat Heavy Electricals Ltd., incorporated in the year 1964, is a Mid Cap company (having a market cap of Rs 24722.65 Crore) operating in Engineering sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 7245.16 Crore, up 59.85 % from last quarter Total Income of Rs 4532.39 Crore and up 39.50 % from last year same quarter Total Income of Rs 5193.51 Crore. Company reported net profit after tax of Rs -1045.46 Crore in latest quarter.
Investment Rationale
Macro challenges in thermal power persist and may further impact execution and revenue growth prospects. Order intake outlook is weak and most order finalisations are getting delayed. High receivables at Rs313bn, growth and margin stress may impact RoCE. Absence of any meaningful alternative to thermal power is likely to weigh on the overall performance in medium to long term, hence, the brokerage maintains SELL on the stock. It rolls forward valuation to FY23E earnings with an unchanged target multiple of 15x resulting in a target price of Rs40 (previously Rs33 at 15x Sept’22 earnings).
Promoter/FII Holdings
Promoters held 63.2 per cent stake in the company as of March 31, 2021, while FIIs held 4.5 per cent, DIIs 12.5 per cent and public and others 19 per cent.
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