BHEL - 4QFY2013 Result Review - Angel Broking

BHEL's 4QFY2013 results were better than our expectations as well as street estimates. BHEL reported a 2.1% yoy decline in top-line to Rs. 18,850cr. However, the company positively surprised on the operating front, with margin contraction of only 100bp yoy to 24.2%, due to softening of commodity prices and cost control measures. Consequently, PAT declined by only 4.2% yoy to Rs. 3,238cr.

However, slowdown in investment cycle (resulting in lower order intake) and various problems in power sector continue to remain overhang on the stock. Also, we still expect BHEL's margin to gradually decline over next few years due to tough competition. Hence, we maintain Neutral rating on the stock.

Source : Equity Bulls

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