Hold BHEL, says Bonanza

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Bonanza has come out with a research report on BHEL . The research firm said investors could continue to hold the stock, in its report dated February 8, 2010.

The report says, "BHEL has augmented its manufacturing capacity from 10000 Mw, to 15000Mw and plans to further increase to
20000Mw by 2012, which would translate to an order book execution capability of close to Rs 64000 crore for BHEL. The company has a strong order book, which would ensure continued cash flow in the near future. Moreover, the company is a leader in the power EPC space and the current power need of the nation would continue to bring in fresh orders for the company. The company plans to undertake a host of Brownfield and Greenfield expansion."

"At current market price, the counter is trading at an earning multiple of 29x for forward EPS of 80.7 in FY10. Capacity augmentation to 15000 Mw would result in order capability execution to jump up to Rs 48,000 crore, however we have estimated a top line of Rs 40,000 crore for FY11 and an EPS in 102-105 range for FY11. Investors can continue to hold the stock," according to Bonanza report.

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To read the full report click on the attachment