This is what analysts make of BHEL post FY13 nos

Moneycontrol Bureau

Bharat Heavy Electrical Ltd (BHEL) reported provisional profit of Rs 6485 crore, up 8 percent year-on-year. Though, this is the first time in eleven years that the company has posted a decline in bottomline, the numbers are above market expectation on improved order flow.

The power equipment maker's turnover increased marginally to Rs 50,015 crore, which is good enough, considering the fact that the sector is confronted with stiff competition for fewer orders.

Addressing media post Q4 earnings, BP Rao, chairman of the company said that FY13's order inflow jumped 47 percent from a year-ago period. Its order book as on March 31 stood at Rs 1.15 lakh crore. Power sector fetched Rs 22,553 crore adding 9,627 MW orders in FY13, he added.

However, analysts are cautious on BHEL stock as they do not see significant uptick in revenues and margins going ahead.

Edelweiss, in its report, said that BHEL's numbers were ahead of its expectation owing to higher-than-expected revenue.

However, sustained pricing pressure and weak revenue has been a key overhang on BHEL stock for quite some time now, states the firm.

The firm has assigned a 'hold' rating on the stock with a target price of Rs 216 as similar concerns are likely to prevail in near term.
 
CLSA has upgraded BHEL from 'sell' to 'underperform' and has maintained  target of Rs 195 following sharp fall in the stock price.
The firm expects EBIDTA and net profit of the company to fall  around 16 per between FY12- FY15.

SBI Caps has also assigned a 'hold' rating with a target price of Rs 192 as it sees limited downside for BHEL considering 30 percent fall it had in FY13. Considering macro scenario where code of conduct will be imposed by the Election Commission, the firm expects slow down in orders.

Nomura has maintained `reduce' rating on the stock with a target price of Rs 174 on belief that the company is at the start of a bad earning cycle as orders which it has already won amid rising competition may hurt margins.

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