Bharat Heavy Electricals Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Bhel reported disappointing Q2FY18 results. The key reason was the EBITDA level loss on account of higher-than-expected employee & other expenses. The company managed to post a PAT but that was on account of higher-than-expected other income Revenues came in at | 6402.9 crore, down 3.9% (I-Direct estimate of | 6335.3 crore). On the segmental front, power segment revenues came in at | 5064.7 crore, down 3.6% YoY whereas industrial...

executable orders available) and a delay in finalization of key orders like Yedadri (non-availability of EC), Panki and Bhusawal. BHEL recorded an operating loss of INR1.0b (est. of INR3.8b profit), as against a profit of INR1.5b in 2QFY17. PAT improved 5.9% YoY to INR1.2b, led by higher other income (INR4.9b v/s INR2.0b in 2QFY17; above est. of INR2.0b). Higher provisioning leads to loss at operating level: Despite a gross margin improvement of 370bp YoY to 39.3%, BHEL posted an operating loss of INR1.0b, led by higher provisioning on account of employee wage revision of...

TG market to grow 3x: New emission norms for coal-fired plants are set to expand the power Boiler-Turbine-Generator (BTG) space three-fold. This entails increased market opportunity for new as well as retrofit equipment. In existing power plants, BHEL to be a key beneficiary given its lions marke..

Q1FY18 revenue was down 2% YoY at Rs 55 bn missing our/consensus estimate of Rs 59/60 bn. On low capacity utilization and Q1 being a lean quarter, the revenue miss resulted in EBITDA loss of Rs 883 mn vs. our estimate of breakeven quarter.

ICICI Securities Ltd | Retail Equity Research Bhel reported disappointing set of Q1FY18 numbers in terms of profitability. Revenues were in line with estimates but EBITDA margins on account of higher-than-expected rise in other income dragged overall profitability. However, higher-than-expected other income helped the company report a profit in spite of EBITDA loss. Order backlog was flat QoQ in Q1FY18 Revenues came in at | 5505.6 crore, down 2.1% (I-direct estimate of...

BHEL's Q4FY17 revenue at Rs 97 bn was down 3% YoY and missed our/consensus expectations of Rs 105 bn. EBITDA at Rs 6.5 bn was impacted by one-time provisions for gratuity and leave salary liabilities.

The pace of order backlog improvement is weak; the hopes are not: In a base-case scenario, FY18 should have started with an executable backlog of Rs770 bn. The fact, however, is BHEL starts FY18 with Rs660 bn. This is not to say the current scenario will remain in perpetuity. With Yadadri project, which is Rs.180 bn in size, is on its way to be executable. This should allay the earnings concern to a large extent, we feel. Thereby, the revised order backlog, if executed with 35% gross margins, can promise a J-curve in earnings. Indeed, the jury is out on wage hikes. And so is the case with incremental provisioning to be made. We, however, remain bullish....

Revenue decreased by 5.55% to Rs. 6187.48 Cr in Q3FY17 when compared to the previous quarter. On the other hand, it rose by 18.27% when compared with Q3FY16.

Result, by definition, a beat: We anticipated Revenue/EBITDA/Net Income of Rs60 bn/Rs861 mn/Rs457 mn respectively. Led by (1) faster conversion of existing orders; (2) provisions releases; and (3) cost optimization, BHEL pleasantly surprises us with Rs63 bn/Rs2.2 bn/Rs935 mn. Adverse exchange rate and lower treasury income leads to net margin disappointment. Yet they fade out with brighter prospects in days to come. Slow moving can fill the order inflow void: Currently, BHEL has Rs980 bn order backlog. However, the executable component is just Rs550 bn. The remaining Rs430 bn, understandably, is slow moving. And that is about to change. First, on Yadadri project, which is...

Execution Phase Picking-Up; Sustenance Key Going Forward:Order book at a comfortable position - Outstanding order book by end of Q3FY17 reached to Rs.984 Bn with Power, Industry and International segment splitting as Rs.887 Bn, Rs.57 Bn and Rs.40 Bn respectively. BHEL managementclassifies orders as executable portion with no over-hang which comes in close to Rs.550 Bn executable in 2-3 years. Management expects Rs.220 Bn of ordersmoving into executable portion in next 3-6 months comforts visibility going forward.