Bhel: Orderbook at Rs 135 bn - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Bhel: Orderbook at Rs 135 bn

Oct 29, 2002

Engineering behemoth, Bharat Heavy Electricals Limited (Bhel) has posted an 11% YoY dip in 2QFY03 net sales. A dip in the operating margins and higher tax provisions for the quarter resulted in a 26% dip in bottomline. This performance is however better than its 1QFY03 performance where it declared a net loss of Rs 489 m. Also, on a half yearly basis, the picture looks very positive.

(Rs m) 2QFY02 2QFY03 Change 1HFY02 1HFY03 Change
Net Sales 14,399 12,891 -10.5% 23,279 21,661 -7.0%
Other Income 483 564 16.7% 815 799 -2.0%
Expenditure 12,914 11,634 -9.9% 22,761 20,635 -9.3%
Operating Profit (EBDIT) 1,484 1,257 -15.3% 518 1,025 97.8%
Operating Profit Margin (%) 10.3% 9.8%   2.2% 4.7%  
Interest 185 120 -35.1% 385 238 -38.2%
Depreciation 411 469 14.2% 829 903 8.9%
Profit before Tax 1,372 1,232 -10.2% 120 684 469.0%
Tax -92 147 - -92 88 -
Profit after Tax/(Loss) 1,464 1,085 -25.9% 213 596 180.3%
Net profit margin (%) 10.2% 8.4%   0.9% 2.8%  
No. of Shares (eoy) (m) 244.8 244.8   244.8 244.8  
Diluted Earnings per share* 23.9 17.7   1.7 4.9  
P/E Ratio   9.0     32.9  
*(annualised)            

On a half yearly basis, Bhel has reported a 7% dip in topline, but has finished 1HFY03 with over 180% growth in bottomline. This improvement shows because in June quarter last year Bhel recorded a net loss of Rs 1.3 bn. Historically, Bhel's performance has been volatile quarter to quarter due to the inherent nature of its business. At the end of the September quarter the company's orderbook stood at Rs 135 bn. So in all likelihood, Bhel is set for a good FY03 and FY04 going forward.

(Rs m) 2QFY02 2QFY03 Change 1HFY02 1HFY03 Change
Raw material 6,689 5,467 -18.3% 11,097 9,038 -18.6%
Staff 3,692 3,628 -1.7% 7,066 7,018 -0.7%
Others 2,090 2,152 3.0% 3,797 3,810 0.3%
Deffered revenue expenditure 443 387 -12.6% 800 770 -3.8%
Total expenditure 12,914 11,634 -9.9% 22,761 20,635 -9.3%

As per Bhel's release, 'the topline performance in September quarter was affected to a large extent by non-receipt, delayed receipt, cancellation of orders, delay in customer clearances for dispatches, export dispatches not reaching the port in time etc. Two export shipments (of sale value of Rs 840 m) which had been dispatched from the manufacturing centers to the ports, could not be shipped before 30th September '02 (they have since been shipped). These have been shown as finished goods in the quarterly results and do not form part of sales. This has affected the bottomline of the quarter, which otherwise has shown marked improvement in other operational parameters'.

The power industry contributed 66% to Bhel's topline in 1HFY03. The EBIT from the sector was a healthy 23%. However, the EBIT from other industries only 3% in 1HFY03 reflecting the difficult economic environment.

Revenue break-up
(Rs m) 1QFY03 2QFY03 1HFY03
Power 6,160 10,415 16,575
% of sales 61.3% 69.4% 66.1%
Industry 3,894 4,588 8,482
% of sales 38.7% 30.6% 33.9%
Total gross revenues 10,054 15,003 25,057
EBIT break-up
(Rs m) 1QFY03 2QFY03 1HFY03
Power 1,282 2,588 3,870
EBIT as % of power sales 20.8% 24.8% 23.3%
Industry -47 316 269
EBIT as % of industry sales -1.2% 6.9% 3.2%

The stock trades at Rs 160, a P/E of 6.9x our FY03 expected earnings. While earnings volatility is a concern, we expect Bhel to record better growth in the coming quarters.


Equitymaster requests your view! Post a comment on "Bhel: Orderbook at Rs 135 bn". Click here!

  

More Views on News

BHEL Announces Quarterly Results (3QFY20); Net Profit Down 17.3% (Quarterly Result Update)

Feb 13, 2020 | Updated on Feb 13, 2020

For the quarter ended December 2019, BHEL has posted a net profit of Rs 2 bn (down 17.3% YoY). Sales on the other hand came in at Rs 57 bn (down 22.6% YoY). Read on for a complete analysis of BHEL's quarterly results.

BHEL Announces Quarterly Results (1QFY20); Net Profit Down 239.0% (Quarterly Result Update)

Aug 13, 2019 | Updated on Aug 13, 2019

For the quarter ended June 2019, BHEL has posted a net profit of Rs 2 bn (down 239.0% YoY). Sales on the other hand came in at Rs 45 bn (down 23.7% YoY). Read on for a complete analysis of BHEL's quarterly results.

BHEL 2017-18 Annual Report Analysis (Annual Result Update)

Dec 19, 2018 | Updated on Dec 19, 2018

Here's an analysis of the annual report of BHEL for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of BHEL. Also includes updates on the valuation of BHEL.

Garden Reach Shipbuilders and Engineers Ltd: Is This PSU Shipbuilder Worth Betting On? (IPO)

Sep 24, 2018

Should you apply for the IPO of Garden Reach Shipbuilders and Engineers Ltd?

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

BHEL SHARE PRICE


Sep 18, 2020 (Close)

TRACK BHEL

COMPARE BHEL WITH

MARKET STATS