BHEL - Q1FY13 Result Update - Kotak

BHEL reported numbers are in line with estimates on the profit front. However, EBITDA margins dip was much higher due to higher freight charges and provisions. Forex gain of Rs 1.7 bn enabled the company to meet our profit estimates.

- Quarterly order intake run-rate remains low by historical levels as ordering remains sluggish on delays in project finalization.

- Expanding working capital and lower client advances is leading to decline in cash balances which should lead to lower other income (10% of PBT in FY12).

- Our sector view remains negative. Valuations supportive but lack of trigger and poor sector outlook constrains a favourable view.

Source : Equity Bulls

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