Gautam Chhaochharia, Head of India Research at UBS Securities told CNBC-TV18, "We still maintain our buy rating on Bharat Heavy Electricals (BHEL). The problem with a stock like BHEL, which you have seen even early last decade, it is very difficult to time the bottom when the cycle turns. The stock is attractively valued, but it has been attractively valued for more than a year now. Visibility on order flow improvement is not there clearly. There is some progress on what is happening on the power sector mess and that would be the biggest driver for a stock like BHEL ultimately."
He further added, "The rally we have seen recently is more macro or broader market driven. The market is hoping for some kind of recovery. BHEL is again forced into the basket of being very attractively valued and a strong balance sheet. So it also participated in that rally, but for a sustainable big upmove over next three years we have to see visibility on power sector restructuring etc. On that obviously the big point to be made is these kind of issues do not get resolved overnight or in a quarter. It takes two to three years to get resolved and we are only one-year into it. So over the next two years the trajectory will be volatile. We still have a buy on BHEL and like the name even at current levels."
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