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Bharat Heavy Electricals Ltd. (BHEL) | Q3FY13 Result Update




IndiaNivesh Securities Pvt Ltd


01 Feb 2013





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Bharat Heavy Electricals Ltd. (BHEL) | Q3FY13 Result Update Bad set of numbers, Other Income lifts the PAT BHEL reported a top-line of Rs 100.4 bn, ~6.5% below our expectations of Rs 107.4 bn. The reported top-line was down 4.7% year-over-year and 3.7% sequentially. On net profit front, disappointment continued, as BHEL reported a net profit of Rs 11.8 bn, 18.4% below our expectation of Rs 14.4 bn. In other words, reported net margins of BHEL stood at 11.8% against previous quarters 12.3% and year-ago levels of 13.6%. Outlook & Valuation: At CMP of Rs 225 (at consolidated level) the stock is trading at FY13E & FY14E, P/E multiple of 8.7x & 8.1x, respectively. On revising downwards our topline & bottomline numbers and assigning 9.0x P/E multiple to FY14E based EPS of Rs 27.8, we arrive at revised price target of Rs 250. Given the limited upside potential the stock has, we downgrade the rating by one notch from BUY to HOLD.

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