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BHEL’s provisional PAT for FY12 and Q4FY12 is ahead of ours and Street
expectations led by higher operating margins while revenue was below
our expectations. Importantly, order inflow for the year plunged 63% YoY
to INR220bn. Order book stands at INR1.35tn, down 18% YoY. We
maintain ‘HOLD’ with a target price of INR266.
Bottom line surpasses expectations
BHEL’s Q4FY12 PAT came above our estimate at INR32bn (up 15% YoY). Revenue grew
13% YoY to INR207bn.For the full year; revenue growth came in at 17% and profit
growth at 14%.
Order inflow weak; Management targets 15‐16GW in FY13
The company’s Q4FY12 order inflow declined 60% YoY to INR130bn. For the full year
also order inflow dipped 63% YoY to INR220bn. The fall is predominantly in the power
segment, which plunged more than 70% YoY to INR135bn. Industrial segment posted
flat growth YoY at INR87bn. BHEL’s order book declined 18% YoY to INR1.35tn—first dip
over the past 10 years. Management in FY13 is targeting order inflow of 15‐16GW while
of delivery of 22GW. We believe that it is unlikely to achieve the target since structural
concerns persist. We have build in 7.5GW of order intake for FY13. BHEL has
commissioned 5GW of additional capacity taking its total installed capacity to 20GW.
Stake sale plan put on hold
BHEL has withdrawn FPO papers filed with the capital market regulator for share sale.
The stake sale, which had been approved by the Cabinet in 2011, was expected to raise
about USD1bn.
Outlook and valuations: Weak momentum; maintain ‘HOLD’
We do not anticipate any revival in the sector over the near term given environment
clearance, land and coal linkage issues. The stock currently trades at P/E of 9.8x and
9.4x FY13E and FY14E earnings, respectively. We maintain ‘HOLD /Sector Performer’
recommendation/rating on the stock with a target price of INR266.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
BHEL’s provisional PAT for FY12 and Q4FY12 is ahead of ours and Street
expectations led by higher operating margins while revenue was below
our expectations. Importantly, order inflow for the year plunged 63% YoY
to INR220bn. Order book stands at INR1.35tn, down 18% YoY. We
maintain ‘HOLD’ with a target price of INR266.
Bottom line surpasses expectations
BHEL’s Q4FY12 PAT came above our estimate at INR32bn (up 15% YoY). Revenue grew
13% YoY to INR207bn.For the full year; revenue growth came in at 17% and profit
growth at 14%.
Order inflow weak; Management targets 15‐16GW in FY13
The company’s Q4FY12 order inflow declined 60% YoY to INR130bn. For the full year
also order inflow dipped 63% YoY to INR220bn. The fall is predominantly in the power
segment, which plunged more than 70% YoY to INR135bn. Industrial segment posted
flat growth YoY at INR87bn. BHEL’s order book declined 18% YoY to INR1.35tn—first dip
over the past 10 years. Management in FY13 is targeting order inflow of 15‐16GW while
of delivery of 22GW. We believe that it is unlikely to achieve the target since structural
concerns persist. We have build in 7.5GW of order intake for FY13. BHEL has
commissioned 5GW of additional capacity taking its total installed capacity to 20GW.
Stake sale plan put on hold
BHEL has withdrawn FPO papers filed with the capital market regulator for share sale.
The stake sale, which had been approved by the Cabinet in 2011, was expected to raise
about USD1bn.
Outlook and valuations: Weak momentum; maintain ‘HOLD’
We do not anticipate any revival in the sector over the near term given environment
clearance, land and coal linkage issues. The stock currently trades at P/E of 9.8x and
9.4x FY13E and FY14E earnings, respectively. We maintain ‘HOLD /Sector Performer’
recommendation/rating on the stock with a target price of INR266.
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