BHEL report by Kotak Sec PDF link

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http://www.kotaksecurities.com/pdf/dmb/MorningInsight24052012.pdf


BHEL
PRICE: RS.209 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.236 FY13E P/E: 8.2X
 BHEL had already reported provisional numbers in April 2012. The audited
numbers for Q4 FY12 are higher than the provisional numbers
aided by better margins and increased other income.
 The management estimates 24000-25000 MW of orders to be awarded in
FY13. Out of which, BHEL expects to win orders 14000-15000 MW consisting
of NTPC orders from the bulk tender and couple of state and private
utility orders. The management indicated that ~ 7000-8000 MW of order
pipeline are spillover projects that were scheduled to be awarded in the
previous year.
 Sector Outlook - Industry heading towards a prolonged period of overcapacity.
Consequently, we forecast revenues to decline by 3% in FY13 to
Rs 490 bn. Revenue outlook beyond FY13 also appears to be subdued due
to likely decline in order backlog.
 At the current price, BHEL is trading at a 8.2x FY13 earnings. Based on
FY13E, the stock is trading at 4.5x EV/EBITDA multiple.