Buy Bharat Heavy Electricals, target price Rs 100: ICICI Securities

ICICI Securities has buy call on Bharat Heavy Electricals with a target price of Rs 100. The current market price of Bharat Heavy Electricals is Rs 58.7. Time period given by analyst is one year when Bharat Heavy Electricals Ltd. price can reach defined target.

Bharat Heavy Electricals Ltd., incorporated in the year 1964, is a Mid Cap company (having a market cap of Rs 20683.46 Crore) operating in Engineering sector.

Bharat Heavy Electricals Ltd. key Products/Revenue Segments include Erection & Other Services, Other Operating Revenue, Export Incentives and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 4742.28 Crore, down -42.04 % from last quarter Total Income of Rs 8181.72 Crore and up 59.85 % from last year same quarter Total Income of Rs 2966.77 Crore. Company reported net profit after tax of Rs -201.37 Crore in latest quarter.

Investment Rationale
Given the ongoing energy crisis, the brokerage expects execution on power orders to gather pace over the coming quarters. Besides, with the recent correction in commodity prices, margins should also expand gradually. This, coupled with BHEL’s efforts to improve cashflow and reduce receivables, should help build sustainable growth in profitability. Risks to argument include: delay in ordering activity, and any further increase in raw material prices.

Promoter/FII Holdings
Promoters held 63.17 per cent stake in the company as of 30-Jun-2022, while FIIs owned 4.22 per cent, DIIs 12.59 per cent.