Karvy's research report on BHELRevenue de-grew on a YoY basis during Q2FY16 and H1FY16 to the extent of 3.4% and 8.8% to reach to Rs.1,02,997mn by H1FY16. Industry and Power segments de-grew by 8.6% and 7.5% on a YoY basis during H1FY16 to reach to Rs.24,825mn and Rs.82,114mn respectively. We believe our estimates fairly reflect impact of material cost along with possible impact of yet-to-be-announced pay commission coming in during FY17E driving return ratio, RoCE, to reach to 2.2% by FY17E. Hence, we revise our price target to Rs.144 based on 1x FY17E book value per share reiterating our ‘Sell’ recommendation representing downside of 25%.
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