BHEL plunges 12% on poor Q1 nos, brokerages remain bearish

Moneycontrol Bureau

Shares of state-owned Bharat Heavy Electricals (BHEL) crashed 11.6 percent in early trade Monday to touch more than 7.5 years low of Rs 132, after it reported a dismal performance on every parameter during April-June quarter.

The first quarter standalone net profit of the state-run capital goods major halved to Rs 465.4 crore from Rs 920.9 crore in a year ago period, dented by weak power segment performance, despite higher other income.

Net sales dropped 23.7 percent to Rs 6,352.5 crore in April-June quarter from Rs 8,326.2 crore in corresponding quarter of last fiscal.

Earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 74.7 percent on yearly basis to Rs 283 crore and EBITDA margin plunged 890 bps year-on-year to 4.5 percent in the first quarter.

Meanwhile, revenues from its power segment dipped 20.5 percent Y-o-Y to Rs 5,378.60 crore and industry segment declined 34.4 percent to Rs 1,292.60 during the same quarter.

The order book of the state-run capital goods company stood at Rs 1,08,600 crore as on June 30.

Brokerage houses

Goldman Sachs recommended a sell rating on the stock, driven by lower order inflows and significantly deteriorating margins. The brokerage house has a target of Rs 136 on the stock.

JP Morgan maintained its underweight rating on the stock and cut target price to Rs 145/share from Rs 180/share while Bank of America Merrill Lynch also maintained its underperform rating and cut target price to Rs 143/sh from Rs 174/share.

Meanwhile, Citi maintained sell rating and reduced target price to Rs 140/share from Rs 185/share.

Deutsche Bank downgraded BHEL to sell from hold and cut target price to Rs 126/share from Rs 169/share.

At 09:47 hours IST, the stock was quoting at Rs 133.85, down 10.41 percent on the BSE.