BHEL - To Oscillate In Rs200-250 Zone, Retain Hold - Emkay

Reco: HOLD
CMP: Rs227
Target Price: Rs220

- 10% yoy decline in net profit meets estimates. Revenues flat at Rs106 bn, EBITDA margins +20 bps yoy. Power healthy (EBIT% at 19.7%) but Industry disappoints (Sales -31% yoy)

- Debt rises to Rs18 bn (Vs Rs1.2 bn in Mar'12) as working capital continues to deteriorate - increases 49% over Mar'12 to Rs165 bn (net of cash)

- Order inflows remain muted as expected - secures Rs32 bn (YTD 40% of target achieved). Order book declines 8% qoq to Rs1.2 bn - led by negative currency impact

- Expect BHEL to oscillate between fair value (under different valuation methodologies) of Rs200-250 per share. Retain Hold rating on the stock with price target of Rs220

Source : Equity Bulls

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