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BHEL is slated to report its provisional numbers for FY11 on April 4. The key data point to watch
out would be order inflow numbers. Given the delays in NTPC bulk tender, the order inflow
guidance of Rs590bn could be at risk unless BHEL is able to offset it with other orders. We
maintain our Buy rating on the stock
Order inflow number will be key in provisional numbers
BHEL is set to report its provisional numbers on April 4. This is an annual practice where the
company discloses its gross sales and PBT numbers along with details of order inflows and
order book
The key data point to look st would be order inflow numbers for the company. The company
at the beginning of the year guided for an order inflow of Rs590bn, which they have
maintained even at the end of the nine month results.
Given the delay in NTPC bulk tender for supercritical boilers, the order inflow guidance could
be at risk unless BHEL is able to offset with other orders.
The company has done order inflow of Rs365bn till the end of nine months and need another
Rs225bn of inflows in Q4'11, a flattish growth on a yoy basis.
FY11 PAT expected to grow 34% yoy
We expect the company to clock in FY11 revenues of Rs420bn and a PAT of Rs59bn. This
translates into a yoy increase of 25% sales and 34% profits. We expect EBIDTA at Rs83bn,
which translates into a margin of 19.8% (+120bp yoy)
For 9 months, the company has reported revenues of Rs241bn and PAT of Rs32bn, which is
a yoy growth of 24% and 34%, respectively. EBIDTA for the 9 months was Rs47bn which is a
margin of 19.4%
In terms of Q4'11, this means revenues of Rs179bn and PAT of Rs26bn, yoy growth of 28%
and 35% respectively. EBIDTA in Q4'11 would be Rs36bn, with margins at 20.4% (flat yoy).
Bulk tender overhang likely to continue
The overhang on the stock due to the delay in bulk tender is likely to continue, with these
orders likely to spill over into FY12
While BHEL is likely to get some orders, pricing will be keenly watched as we believe that is a
more important data point than winning orders as competition goes up with other players like
L&T-Mitsubishi and BGR-Hitachi.
BHEL has been competitive in recent orders, emerging the lowest bidder against BGR-Hitachi
for the Rajasthan project of two plants of 2 x 660MW each
We continue to maintain our Buy rating on the stock. Stock trades at ~16xFY12F EPS of
Rs136.5
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
BHEL is slated to report its provisional numbers for FY11 on April 4. The key data point to watch
out would be order inflow numbers. Given the delays in NTPC bulk tender, the order inflow
guidance of Rs590bn could be at risk unless BHEL is able to offset it with other orders. We
maintain our Buy rating on the stock
Order inflow number will be key in provisional numbers
BHEL is set to report its provisional numbers on April 4. This is an annual practice where the
company discloses its gross sales and PBT numbers along with details of order inflows and
order book
The key data point to look st would be order inflow numbers for the company. The company
at the beginning of the year guided for an order inflow of Rs590bn, which they have
maintained even at the end of the nine month results.
Given the delay in NTPC bulk tender for supercritical boilers, the order inflow guidance could
be at risk unless BHEL is able to offset with other orders.
The company has done order inflow of Rs365bn till the end of nine months and need another
Rs225bn of inflows in Q4'11, a flattish growth on a yoy basis.
FY11 PAT expected to grow 34% yoy
We expect the company to clock in FY11 revenues of Rs420bn and a PAT of Rs59bn. This
translates into a yoy increase of 25% sales and 34% profits. We expect EBIDTA at Rs83bn,
which translates into a margin of 19.8% (+120bp yoy)
For 9 months, the company has reported revenues of Rs241bn and PAT of Rs32bn, which is
a yoy growth of 24% and 34%, respectively. EBIDTA for the 9 months was Rs47bn which is a
margin of 19.4%
In terms of Q4'11, this means revenues of Rs179bn and PAT of Rs26bn, yoy growth of 28%
and 35% respectively. EBIDTA in Q4'11 would be Rs36bn, with margins at 20.4% (flat yoy).
Bulk tender overhang likely to continue
The overhang on the stock due to the delay in bulk tender is likely to continue, with these
orders likely to spill over into FY12
While BHEL is likely to get some orders, pricing will be keenly watched as we believe that is a
more important data point than winning orders as competition goes up with other players like
L&T-Mitsubishi and BGR-Hitachi.
BHEL has been competitive in recent orders, emerging the lowest bidder against BGR-Hitachi
for the Rajasthan project of two plants of 2 x 660MW each
We continue to maintain our Buy rating on the stock. Stock trades at ~16xFY12F EPS of
Rs136.5
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