Buy Bharat Heavy Electricals; target of Rs 200: Axis Direct

Axis Direct is bullish on Bharat Heavy Electricals has recommended buy rating on the stock with a target price of Rs 200 in its research report dated August 17, 2017.

August 23, 2017 / 16:19 IST

26 Aug, 2025 12:21

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Axis Direct's research report on Bharat Heavy Electricals

Q1FY18 revenue was down 2% YoY at Rs 55 bn missing our/consensus estimate of Rs 59/60 bn. On low capacity utilization and Q1 being a lean quarter, the revenue miss resulted in EBITDA loss of Rs 883 mn vs. our estimate of breakeven quarter. Gross margin at 40% was up 300 bps YoY and in line with estimates. Higher other income (aided by FX gain Rs 2.2 bn) resulted in PAT at Rs 0.8 bn (up 4% YoY).

Outlook

Q1 order inflow at ~Rs 18 bn was down 50% YoY and order backlog at Rs 1,014 bn was down 6%. However, executable order backlog improved to Rs 618 bn (vs. Rs 570 bn YoY). Yadadri project has got environmental clearance in Q1 and should become executable in Q2, which would increase executable order backlog further to ~Rs 800 bn. Increase in executable backlog would drive strong execution in FY19.

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