Hold BHEL: P-Sec

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Broking house, P-Sec has recommended hold rating on BHEL. At current level the stock is traded at 20.1x FY08P and 22x its FY09P earnings.

P-Sec research report on BHEL

BHEL has recently won an order for mega turnkey contracts for setting up two Power Projects of 1,000 MW each from Damodar Valley Corporation (DVC), this Project will add 48 million units every day to the Grid on commissioning. The order is significant for BHEL, as it is valued at Rs 65 billion and constitutes to around 10% of the total order book.

The company has also received an order worth Rs 29 billion for the supply and installation of the Main Plant Package at the upcoming Jhajjar Super Thermal Power Project in Haryana, involving three units of 500 MW each. These two recent orders have taken the total order book position to an historic level of Rs 718 billion. At current levels the stock trades at 20.1x FY08P and 22x its FY09P earnings, we recommend hold on the stock.