Hold BHEL, says P Sec

Published on Wed, Dec 13, 2006 at 13:57 |  Source : Moneycontrol.com

Updated at Wed, Dec 13, 2006 at 14:04  

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Broking house, P-Sec has recommended hold rating on the Bharat Heavy Electricals , BHEL.

 

P-Sec report on BHEL:

 

"BHEL is scouting for suitable companies with niche technology and are planning for takeovers in US and Europe. The estimated investment for the takeovers and the expansion plans is around Rs 10000 crore."

 

"For Q2FY07 the top line has grown by 33% y-o-y, as the Industry segment grew at a robust rate of 35% y-o-y, whereas Power segment grew at a lower rate of 29% y-o-y."

 

"The EBITDA margins for the quarter were under pressure as they dipped by 104bps y-o-y to 13.66%. The dip in margin can be ascribed to increase in raw material cost by 210bps (primarily due to high steel prices). On the bottomline company has reported a growth of 38% y-o-y, which can be attributed to rise in interest income causing the other income to increase by 60% y-o-y."

 

"The order book of the company stands at Rs 457 billion, which is 3.4x its FY06 sales."

  

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