Bhel - Result Update - ICICI Securities

Bhel's Q4FY20 revenues were at Rs. 5049.3 crore with a significant fall of 51% YoY impacted by execution headwinds and Covid-19. It registered a loss of revenue of ~ Rs. 4000 crore owing to Covid-19. On the segmental front, power segment revenues declined 61% to Rs. 3174.7 crore YoY whereas industrial segment revenue declined 18% to Rs. 1419 crore YoY. The company registered EBITDA loss of Rs. 561.7 crore (vs. EBITDA of Rs. 1395 crore in Q4FY19) YoY owing to lesser revenue booking and higher-than-expected operating expenses. Net loss came in at Rs. 1534 crore (vs. net profit of Rs. 682.7 crore in Q4FY19) owing to significant increase in interest expense (up 46%, YoY) and higher effective tax rate (due to deferred tax adjustment).

Valuation & Outlook

Execution challenges and high level of receivables (Rs. 36471 crore, down 5.5% vs. FY19) are key concerns and could hamper medium term growth prospects. However, transformation strategy to optimise operational cost and initiatives like utilisation of manufacturing facilities & industrial land are likely to help diversify in non-power business and aid long term revenue visibility. We revise our target price to Rs. 33 (15x FY22EPS) and maintain our HOLD rating. Key risk: Power sector outlook and structural changes remain key concerns.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Bhel_Q4FY20.pdf

Shares of BHARAT HEAVY ELECTRICALS LTD. was last trading in BSE at Rs.29.1 as compared to the previous close of Rs. 31.45. The total number of shares traded during the day was 7359041 in over 14701 trades.

The stock hit an intraday high of Rs. 30.6 and intraday low of 28.45. The net turnover during the day was Rs. 217614638.

Source : Equity Bulls

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