Hold BHEL; target Rs 229: Firstcall Research
Firstcall Research has recommended hold rating on Bharat Heavy Electricals (BHEL) with a target price of Rs 229 in its March 06, 2013 research report.
March 08, 2013 / 10:53 IST
Firstcall Research has recommended hold rating on Bharat Heavy Electricals (BHEL) with a target price of Rs 229 in its March 06, 2013 research report.
"BHEL engaged in the design, engineering, testing, manufacture, construction, commissioning & servicing of a wide range of products and services for the core sectors of the economy. BHEL and Indian Railways have signed a MoU for setting up a Greenfield Mainline Electric Multiple Unit coach factory at Bhilwara in Rajasthan. BHEL has commissioned a 100 MW hydro power generating set in Vietnam. BHEL has an outstanding order book position of about Rs. 1137000 millions at the end of Q3 FY2012-13. BHEL has secured a contract for the electromechanical equipment package for a 720 MW (4x180 MW) Hydroelectric project in Bhutan. BHEL has approved payment of Interim Dividend @106% i.e. Rs. 2.12 per equity share for the FY 2012-13. BHEL has successful commissioned its first Steam Turbine Generator Unit in Ethiopia Africa. BHEL has bagged the Gold Award under the National Awards for e-Governance 2012-13. Net Sales and Operating Profit of the company are expected to grow at a CAGR of 4% and 3% over 2011 to 2014E respectively.The company's net profit decreased to Rs.11818.50 million against Rs.14326.10 million in the corresponding quarter ending of previous year, a decrease of 17.50%. Revenue for the quarter declines 4.87% to Rs.102197.10 million from Rs.107430.80 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.4.83 a share during the quarter, registering 83.50% decreased over previous year period. Profit before interest, depreciation and tax is Rs.19664.40 millions as against Rs.22764.70 millions in the corresponding period of the previous year.Outlook and Conclusion: At the current market price of Rs.202.80, the stock P/E ratio is at 8.90 x FY13E and 7.91 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.22.78 and Rs.25.64 respectively. Net Sales and Operating Profit of the company are expected to grow at a CAGR of 4% and 3% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 4.86 x for FY13E and 4.22 x for FY14E. Price to Book Value of the stock is expected to be at 1.60 x and 1.33 x respectively for FY13E and FY14E. We recommend hold in this particular scrip with a target price of Rs 229 for Medium to Long term investment," says Firstcall Research report.FIIs holding more than 30% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
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