BHEL - Q1FY21 Result Update - ICICI Securities

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.

Valuation & Outlook

Execution challenges and high level of receivables (~Rs. 35332 crore, down 6.6%, YoY) are key concerns and could hamper medium term growth prospects. However, transformation strategy to optimise operational cost and initiatives like utilisation of manufacturing facilities & industrial land are likely to help diversify in non-power business and provide long term revenue visibility. We revise our target price to Rs. 35 (15x FY22EPS) and maintain our HOLD recommendation.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Bhel_Q1FY21.pdf

Shares of BHARAT HEAVY ELECTRICALS LTD. was last trading in BSE at Rs.36.3 as compared to the previous close of Rs. 37.05. The total number of shares traded during the day was 1685598 in over 3884 trades.

The stock hit an intraday high of Rs. 37.4 and intraday low of 36. The net turnover during the day was Rs. 61676574.

Source : Equity Bulls

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