Hold Bhel; target of Rs 35: ICICI Direct

ICICI Direct's research report on Bhel

Bhel’s Q1FY21 revenues were at Rs 1990.9 crore with a significant decline of 56.1% YoY impacted by execution headwinds and Covid-19. On the segmental front, power segment revenues fell 67.9% to Rs 1119.4 crore YoY whereas industrial segment revenue fell 15.4% to Rs 777.2 crore YoY. The company posted EBITDA level loss of Rs 1058.9 crore (vs. EBITDA level loss of Rs 266.7 crore in Q1FY20) YoY owing to less revenue booking and higher-than-expected operating expenses. Net loss came in at Rs 897.2 crore (vs. net loss of Rs 216.2 crore in Q1FY20), partly aided by deferred tax adjustment.

Outlook

We revise our target price to Rs 35 (15x FY22EPS) and maintain our HOLD recommendation.