ICICI Securities is bullish on the shares of Bharat Heavy Electricals Limited (BHEL), a mid-cap Maharatna company.
The company’s shares were trading at ₹ 55.15 apiece at 11:35 AM on Tuesday. In its research report dated September 22, 2022, the brokerage has maintained a buy call on the shares, with a target price of ₹ 100. This translates to an upside of 81.32%.
ICICI Securities stated that BHEL has witnessed improvement in execution in FY 22, as most covid-related challenges abated. Its revenue in FY22 grew 23% YoY led by a revival in execution post a period of covid-related delays. In addition reduction in fixed costs and reversal of provisions helped EBITDA turn positive at ₹ 7.4bn.
The brokerage expects the company’s operational performance to further improve as execution gathers pace and gross margin expands on the back of softening commodity prices. Further, the company has strengthened its capabilities in the industrial segment and is targeting fast-growing sectors like mobility and defence. Its order inflow in FY22 grew 76% YoY to ₹ 236bn.
Further, it said that the company has been laying emphasis on project closures. This has led to improved cash flow and receivables. The analysts expect that the execution on power orders will gather pace over the coming quarters and margins should expand gradually.
As per data available on the Bombay Stock Exchange’s website, the 52-week high of the company’s shares is at ₹ 78.65 (13 October 2021) and its 52-week low is at ₹ 41.40 (20 June 2022). In addition, it’s all-time high is at ₹ 2925 apiece ( 07 November 2007) and it’s all-time low is at ₹ 19.20 (25 March 2020).
BHEL is one of the largest engineering and manufacturing companies in India. It is engaged in the business of design, engineering, construction, testing, commissioning and servicing of a wide range of products and services with over 180 product offerings to meet the growing needs of the core sectors of the economy.
Written by Simran Bafna
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