Financial highlights
- Revenues in Q4FY11 rose 32.2% to Rs17,921.4 cr y-o-y with an OPM of 23.4%, a y-o-y increase of 280 bps.
- PAT stood at Rs2,798 cr, a growth of 46.5% y-o-y.
- Change in accounting policy during FY11 related to provision for warranties resulted in an increase in revenue and PBT of Rs2,772.8 cr and Rs695.5 cr respectively which was higher than Rs2,450 cr and Rs410 cr stated during the provisional results.
- Order inflow during the quarter was down 4.1% y-o-y. Outstanding order book as of 31st March 2011 stood at Rs1,624 bn providing revenue visibility of over 3 years.
- Company declared a final dividend of Rs17.9 per share in addition to interim dividend of Rs 13.25
per share during the year.
Guidance
BHEL has guided for Rs 66,600 cr (16–17 GW) of order inflow for FY12 while it has set internal revenue target of Rs50,000 cr for FY12. Base targets for gross sales as committed to Ministry of Heavy Industries is Rs45,000 cr.
Outlook
The stock is currently trading at 14 times FY12E. Historically, BHEL has traded between 15-30 times one-year forward earnings, with an average of 23 times. Though BHEL is trading below its historical average P/E, we feel the stock has undergone a de-rating in the recent past due to delay in order inflow and competition concerns.
The positives of intermediate term visibility of revenues and expanded capacity could be partly offset by concerns on long term visibility of revenues due to emerging competition, pressure on margins and overhang of supply of stock due to possible equity dilution. Execution risks have increased due to higher exposure to private capex compared to earlier days where it was exposed to the public sector only. Also, FIIs stake has been falling, though gradually over last 4-5 quarters (from 17.07% in June 30, 2009 qtr to 12.90% in March 2011 qtr).
HDFC Sec expects BHEL to trade in Rs1,798 to Rs2,143 price band (13 times -15.5 times FY12 (E) EPS of Rs138.3) for the next quarter.
BHEL
Source : valuenotes.com
- Revenues in Q4FY11 rose 32.2% to Rs17,921.4 cr y-o-y with an OPM of 23.4%, a y-o-y increase of 280 bps.
- PAT stood at Rs2,798 cr, a growth of 46.5% y-o-y.
- Change in accounting policy during FY11 related to provision for warranties resulted in an increase in revenue and PBT of Rs2,772.8 cr and Rs695.5 cr respectively which was higher than Rs2,450 cr and Rs410 cr stated during the provisional results.
- Order inflow during the quarter was down 4.1% y-o-y. Outstanding order book as of 31st March 2011 stood at Rs1,624 bn providing revenue visibility of over 3 years.
- Company declared a final dividend of Rs17.9 per share in addition to interim dividend of Rs 13.25
per share during the year.
Guidance
BHEL has guided for Rs 66,600 cr (16–17 GW) of order inflow for FY12 while it has set internal revenue target of Rs50,000 cr for FY12. Base targets for gross sales as committed to Ministry of Heavy Industries is Rs45,000 cr.
Outlook
The stock is currently trading at 14 times FY12E. Historically, BHEL has traded between 15-30 times one-year forward earnings, with an average of 23 times. Though BHEL is trading below its historical average P/E, we feel the stock has undergone a de-rating in the recent past due to delay in order inflow and competition concerns.
The positives of intermediate term visibility of revenues and expanded capacity could be partly offset by concerns on long term visibility of revenues due to emerging competition, pressure on margins and overhang of supply of stock due to possible equity dilution. Execution risks have increased due to higher exposure to private capex compared to earlier days where it was exposed to the public sector only. Also, FIIs stake has been falling, though gradually over last 4-5 quarters (from 17.07% in June 30, 2009 qtr to 12.90% in March 2011 qtr).
HDFC Sec expects BHEL to trade in Rs1,798 to Rs2,143 price band (13 times -15.5 times FY12 (E) EPS of Rs138.3) for the next quarter.
BHEL
Source : valuenotes.com
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