BHEL Q2 PAT seen down 37% at Rs 798cr, order inflow may dip
Profit after tax of the company may fall 37.4 percent year-on-year to Rs 798 crore and net sales is likely to decline 17.9 percent Y-o-Y to Rs 8,669 crore in three-month period ended September 2013.
November 06, 2013 / 13:46 IST
State-controlled capital goods major BHEL will annnounce its second quarter (July-September) results today. According to a CNBC-TV18 poll, analysts feel the company may report weak order inflow during Q2FY14 despite a low base of Rs 3,200 crore in a year ago period.
BHEL has announced only Rs 400 crore worth of orders in the quarter gone by. Negative order intake in FY13 will also keep revenues under pressure on a yearly basis in FY14, feel analysts.Also Read: BHEL to disappoint in Q2; see FY14 sales 22% lower, says QuantAccording to them, company's topline will also falter on weak execution and increasing proportion of slow moving orders while low margin orders will keep margins under pressure during September quarter.Profit after tax of the company may fall 37.4 percent year-on-year to Rs 798 crore and net sales is likely to decline 17.9 percent Y-o-Y to Rs 8,669 crore in three-month period ended September 2013.Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to slip 40.5 percent on yearly basis to Rs 1,131 crore and operating profit margin may plunge 500 basis points Y-o-Y to 13 percent.According to poll, problems for BHEL are: 1) Market pie has shrunk to 8 gigawatt in FY14 as against earlier expectations of 15 gigawatt; 2) Pricing is unlikely to improve for BTG equipment space; 3) BHEL’s diversification initiatives are unlikely to yield desired results due to technology gaps; and 4) Balance sheet stress is increasing due to rise in bad debts as debtors worth Rs 8,000 crore are overdue since last 1-2 years.Most analysts remain negative on the fundamentals of the stock, saying that it will take two years for the capital goods industry to revive. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
