Bharat Heavy Electricals Limited (BHEL) is the government’s largest engineering and manufacturing public sector firm in India. The company is involved in the production of integrated power plant equipment and weapons. Company serves domestic as well as international clients.
The company’s shares were trading at Rs 85.55 in Friday’s- session, up 1.12 percent from the previous close price of Rs 84.35, It is a Mid-cap company with a market capitalization of Rs 29,771 crore.
As per the financials, Operating revenue climbed by 56 percent from Rs 5,263 crore in Q3 to Rs 8,226 crore in Q4. Similarly, net profit increased by 2600 percent from Rs 22 crore to Rs 598 crore.
On a YoY comparison of the metrics, the revenues significantly improved from Rs 21,211 crore during FY 21-22 to Rs 23,364 crore in FY 22-23. For the same time period, Net profit shifted by 7 percent from Rs 392 crore to Rs 421 crore.
Having a positive outlook for the company, ICICI securities has given a ‘Buy’ tag to the company with a target price of Rs 110 indicating an upside of 28 percent as compared to the current price levels.
The reason for such a recommendation is
● Analysts believe that the Indian government is developing new thermal power plants, that the Indian market has a power of duopoly (L&T and BHEL) in plant building, and that BHEL will benefit more as a result of the low competition intensity.
● BHEL has received Rs 120 billion in orders from Indian Railways for Vande Bharat and the Defence sector, bringing the overall order inflow in FY24-YTD to Rs210 billion.
● In addition, BHEL has created a considerable monopoly in defence orders and is the only provider of SRGM Naval weapons. In FY23, for Rs3,800 crore, analysts anticipate a similar-sized deal in FY24.
As per the latest shareholding pattern promoters of the company hold a 63.17 percent stake, Foreign institutional investors (FIIs) hold 8.58 percent and Domestic institutional investors(DIIs) hold a 15.51 percent stake in the company for FY 22-23.
Written By Omkar C
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