Optimistic on Power Grid, says Mayuresh Joshi

Mayuresh Joshi of Angel Broking told CNBC-TV18, "Power Grid is something that I have liked for a length of time and would continue to do so more or less with the assumption that the cost optimisation that the company is embarking upon will yield good dividends. Again the kind of capitalisation that one really expects to come through over the next couple of years is going to be pretty huge. So, I think the return ratios are based on whatever they capitalised and total capex plans as well for FY16-FY17 are close to Rs 22500 crore. Our own estimates for Power Grid are to the tune of 17 percent topline growth over the next couple of years and 19 percent EBITDA growth. Even at these levels at around 1.6 times price to book my own take is that with the kind of reforms that we are probably expected to witness in the power segment, Power Grid can do well. So, I remain very optimistic on Power Grid.""On BHEL clearly the orderbook has shrunk and we have seen some amount of respite come through over the last few quarters. However meaningfully I think one really needs to see working capital constraints go away. You probably need execution to improve at a much faster pace and that too on a consistent basis, quarter after quarter. It is the numbers that will do that talking for them. Their cash is dwindled both in terms of retention buying coming through and what happens with the employee benefits going off, I think that will have a offsetting effect in terms of how financials will pan out. So, I think margins will remain under constraint unless you see a meaningful recovery in the capex cycle which I think a lot of analysts on the street are not foreseeing to happen at least for the next couple of quarters," he said."So, in my opinion at least for the next couple of quarters the underperformance of BHEL might continue."