India Ratings & Research revises rating of BHEL

The rating agency India Ratings & Research has revised the rating on the long term bank facilities of Bharat Heavy Electricals Ltd (BHEL) to 'IND AA' from 'IND AA+' and reaffirmed the outlook to 'Negative'. The rating on the short term facilities have been reaffirmed at 'IND Al+'.

BHEL's rating downgrade and negative outlook factors in continued weaker than expected performance (driven by delays in execution of orders, exacerbated by the disruption caused by the COVID-19), prospects of subdued order book (unlikely to see a quick turnaround on account of excess capacity in the sector, which is also reflected in continued erosion of margins), persistently high working capital cycle, muted success in diversification, and likelihood of deterioration in the balance sheet strength. Working capital intensity has increased with adverse contract terms on mobilization advances, rising contract assets, and delays in collections (leading to reduction in net cash balances). The envisaged diversification initiatives have yet to see meaningful progress and margins remain lower than power segment.

Shares of BHARAT HEAVY ELECTRICALS LTD. was last trading in BSE at Rs.38.65 as compared to the previous close of Rs. 36.7. The total number of shares traded during the day was 6414082 in over 12132 trades.

The stock hit an intraday high of Rs. 39 and intraday low of 36.65. The net turnover during the day was Rs. 243948239.

Source : Equity Bulls

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