bhel: Analysts give weak outlook for BHEL after Q4 earnings

Mumbai: Most analysts predict a weak outlook for Bharat Heavy Electricals going ahead which reported a consolidated loss of Rs 1,532.2 crore for the quarter ended March.

Nomura has a reduce rating on BHEL with an unchanged target price of Rs 26. Morgan Stanley has maintained an underweight rating with a target price of Rs 18. IDFC Securities has maintained neutral rating on the stock with a target price of Rs 30. Jefferies has maintained underperform raing and revised target price to Rs 20 from Rs 18. Phillip Capital has maintained neutral and cut target price to Rs 31 from Rs 35. CLSA has maintained buy rating with target price of Rs 38.

“Q4 was one of the weakest quarters in BHEL’s history, reflecting the major impact of the Covid-19 pandemic. Balance sheet continues to be stretched. BHEL is looking to diversify further but has not given explicit guidance,” said Morgan Stanley.

Jefferies said BHEL’s business model is likely to generate sub-10% return on equity in the medium term as industry overcapacity continues. Elevated working capital requirements are likely to sustain, said Jefferies.

“Outlook on execution continues to remain weak. Management notes lack of labor to be the key factor hurting execution,” said Nomura.

“…thermal order tendering is likely to remain weak until at least FY25,” said Nomura.

[Source – Economic Times]


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