Sell BHEL, says Amar Ambani

Sell BHEL at current levels, says Amar Ambani, Head- Research, IIFL.

Ambani told CNBC-TV18, “BHEL, if one looks at the underlying, which is the power sector where most of the Boiler Turbine Generator (BTG) and other equipment go. I think that is facing a lot of headwinds. While these FSA agreements have come into place. The penalty now with the latest directive is pretty small and which is why Coal India agreed for it and it is not possible for Coal India to supply and meet all it’s obligations on FSA. So it is bound to fail on the obligation and the power sector will continue to face issues as far as raw material is concerned.”
He further added, “Even for the new kind of – for capacities coming up there are going to be problems of land acquisition, environment clearance, so that industry is under pressure and BHEL is facing a lot of competitive pressures, which I don’t think it is prepared for and the order flow if you have been tracking that then that’s been pretty tepid and there is absolutely no visibility on how earnings will pan out in the next 12-15 months and on these grounds most of the FIIs have put off with the stock for the some time now. It continues to be on our sell list too.”