Moneycontrol
Sep 15, 2017 11:28 AM IST | Source: Moneycontrol.com

BHEL slips 4% as analysts maintain sell despite bullet train contract

Kotak expects business opportunity of close to Rs 1,500 crore from bullet train. According to UBS, bullet train contract implies Rs 1,000-1,100 crore annual revenue i.e. 3 percent of FY18 revenue estimates.

BHEL slips 4% as analysts maintain sell despite bullet train contract

Moneycontrol News

State-run power equipment maker BHEL fell as much as 4.4 percent on Friday as analysts retained their negative stance on the stock despite bullet train contract.

Kotak as well as UBS have maintained sell rating on the stock, with target price of Rs 107 and Rs 73, respectively. They feel bullet train opportunity is too small and too far.

According to Sanjeev Zarbade of Kotak Securities, bullet train order is unlikely to provide a material boost to business prospects. The order size is miniscule versus BHEL's annual revenues of Rs 30,000 crore.

Kotak expects business opportunity of close to Rs 1,500 crore from bullet train. According to UBS, bullet train contract implies Rs 1,000-1,100 crore annual revenue i.e. 3 percent of FY18 revenue estimates.

Zarbade also doesn't see bullet train as a re-rating trigger.

On Thursday, BHEL, along with Kawasaki, will make rolling stock for the Mumbai-Ahmedabad bullet train.

"We have been negative on BHEL. We don’t see significant uptick in power segment," Sanjeev Zarbade, analyst at Kotak Securities said in an interview to CNBC-TV18.

UBS also said power segment is not bright with thin order pipeline and weak medium term outlook.

At 11:02 hours IST, the stock price was quoting at Rs 133.30, down Rs 4.10, or 2.98 percent on the BSE.
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