BHEL - Heightened competition keeps risks high - Avendus

BHEL's operating performance remained dismal with indications of sustained client-induced execution slowdown. Order inflows are likely to improve in the Mar13 quarter due to bunching up of some projects.

Reports of increased competitive intensity in bidding for recent BTG tenders raise the risks to our order recovery forecast. The revenue decline is likely to accelerate in the coming quarters and may continue to weigh on the price, in the absence of meaningful order recovery.

We retain the target P/E to 10x. We rollover our TP to Dec13 and cut it to INR194. Maintain Reduce.

Source : Equity Bulls

Keywords