BHEL - No catalysts; Retain HOLD ::Emkay

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BHEL

No catalysts; Retain HOLD

HOLD

CMP: Rs 1,909                                       Target Price: Rs 2,150

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n     Q1FY12 performance below estimates – (1) Revenue up 10% yoy to Rs73 bn (2) EBITDA margins up 70 bps yoy to 15.3% (3) APAT up 22% yoy to Rs8.2 bn

n     Dismal order inflows – Secures orders worth Rs25 bn or 4% of target FY12E order inflows. Order Book declines 2% qoq to Rs1596 bn

n     Typically first quarter earnings contribution lowest – hence not deterred by lower than expected performance. Maintain earning estimates of Rs131.9 for FY12E & Rs139.4 for FY13E

n     Undemanding valuations at 13.7X FY13E earnings. There is lack of earnings or re-rating catalyst. Retain our HOLD rating with target price of Rs2150/Share