BHEL has target of Rs 2300: Kotak Securities

BHEL has target of Rs 2300, says Sanjeev Zarbade, Analyst, Kotak Securities.

Zarbade told CNBC-TV18, "We are looking at BHEL from a value buy point of view. The stock is trading at 14 times FY12 earnings, which is a clear discount to largecap capital goods names like Larsen and Turbo and even others like Siemens and ABB and even Thermax."
He further added, 'From that point of view valuations are clearly undemanding and this stock most of near term revenue ability. It has almost 5 years of order backlog with it. However, on the downside the stock moves in line with the order intake. We have seen that over the last 2-3 years that order intake is reaching maturity stage. That is the reason the stock performance has been tepid but from a valuation point of view we see value in the BHEL stock at these prices."
"We have a target price which we have revised downwards from Rs 2500 to 2300 now. As far as the FPO is concerned definitely from the point of view of a higher supply of paper into the market to that extent it is a dampener on the stock but it remains to be seen at what price the FPO actually comes. To that extent it is a dampener to the stock."