Result Update: Bhel

Result Update: Bhel
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First Published: Mon, Apr 06 2009. 09 43 AM IST

Updated: Mon, Apr 06 2009. 09 43 AM IST
Bhel’s Q4 FY09 and FY09 provisional results are in line with our estimates, with reported profit at Rs12 billion and Rs30 billion for Q4 FY09 and FY09 respectively.
Despite a 28% y-o-y jump in FY09 revenues, its PBT grew by a paltry 3% y-o-y, indicating lower margins. This was due to higher wage provisions at 25% towards pending wage settlement and consumption of high cost inventory.
Excluding this PBT and PAT would have been higher by ~21% and ~25% respectively. Lower material costs should improve operating margin to 20% by FY11.
Bhel’s FY09 order book stands at Rs1.1 trillion, 4.3x FY09 provisional revenues, thus providing strong revenue visibility. Its order inflow also remained strong at Rs596 billion, higher by 20% y-o-y.
During the year it received its maiden order for 800MW supercritical boiler for Krishnapatnam, 660MW supercritical turbine generator sets for NTPC’s Barh-II project and its first ever order for steam generators for 700MWe nuclear sets.
We expect earnings to grow by 34% CAGR over FY09-11. However the recent run up in the stock price leaves little room for upside, but we believe it will outperform the index, we recommend MARKET PERFORMER rating.
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First Published: Mon, Apr 06 2009. 09 43 AM IST
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