BHEL 7% Earnings Upgrade; Retain BUY ::Emkay

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BHEL

7% Earnings Upgrade; Retain BUY

BUY

CMP: Rs 2,114                                        Target Price: Rs 2,760

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n     FY11 flash results beats EMKAY estimates by hefty margin  - (1) Gross revenues up 27% to Rs434.5 bn (2) Net profit up 40% to Rs60.2 bn

n     Announced order inflows of Rs605.1 bn in FY11 and achieved its order inflow guidance – it remained much awaited event also surrounded by pessimism

n     Gains from operating leverage triggered upgrade in earning (highlighted in earlier communication) - Upgrade FY12E earnings by 7% to Rs138.1/Share

n     Attractive valuations at 17.2X FY12E earnings. Reiterate BUY with revised target price of Rs2760/Share – (scaling down earnings multiple from FY06-08 average to FY04-08 average)