X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Bhel: The see-saw continues - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 9, 2001

    Bhel: The see-saw continues

    Engineering behemoth, Bharat Heavy Electricals Limited (Bhel) has posted a net profit of Rs 1,464 m in its second quarter ended September 30, 2001 as against a net profit of Rs 119 m posted in the same period last fiscal.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Gross sales 12,666 15,938 25.8% 21,977 25,575 16.4%
    Other Income 421 483 14.8% 693 815 17.7%
    Expenditure 12,266 14,012 14.2% 21,176 24,256 14.5%
    Operating Profit (EBDIT) 401 1,927 380.8% 802 1,319 64.5%
    Operating Profit Margin (%) 3.2% 12.1%   3.6% 5.2%  
    Interest 28 185 567.5% 53 385 630.4%
    Depreciation 389 411 5.7% 775 829 6.8%
    Profit before Tax 405 1,814 347.5% 666 920 38.2%
    Deffered revenue exp. write off 259 443 70.9% 495 800 61.6%
    Tax 27 -92 - 32 -92 -
    Profit after Tax/(Loss) 119 1,464 1125.9% 139 213 53.0%
    Net profit margin (%) 0.9% 9.2%   0.6% 0.8%  
    No. of Shares (m) 244.8 244.8   244.8 244.8  
    Diluted Earnings per share* 2.0 23.9   1.1 1.7  
    Current P/E ratio (x)   6.2     85.9  
    *(annualised)            

    On the face of it, the performance seems a good comeback YoY. The company's gross sales (including excise) has shot up by 26%, whereas expenditure growth was slower at a little over 14%. This helped the company post an encouraging improvement in operating margins in 2QFY02. Higher interest outgo and increased deferred revenue expenditure write off (including VRS expenses) were the only blips on the sterling 2QFY02 performance.

    On a consolidated half yearly basis, Bhel managed to wipe off Rs 1.3 bn loss it suffered in 1QFY02. But then Bhel's story of late, has been of misses and comebacks. It should be remembered that Bhel had reported a huge loss of Rs 1.8 bn till the first nine months of FY01. However, in the fourth quarter of FY01 (March 2001) it recovered smartly and reported net profits to the tune of Rs 4.8 bn, finishing the fiscal year 2001 with around Rs 3 bn profit.

    Cost-break-up
    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Raw material 5,835 6,689 14.6% 9,284 11,097 19.5%
    Staff 3,174 3,692 16.3% 6,207 7,066 13.8%
    Others 2,010 2,090 4.0% 3,669 3,797 3.5%
    Excise duty 1,246 1,540 23.6% 2,016 2,296 13.9%
    Total expenditure 12,265 14,011 14.2% 21,176 24,256 14.5%

    It is this streak of inconsistency that has taken the valuation game away from this engineering major. Bhel is no doubt, India's No. 1 engineering company and the foremost supplier of power plants, but the off and on periods of the company take a toll on investor confidence.

    Bhel's order book position is healthy. Orders worth Rs 53,740 m have been secured during the first six months of the current year. Order book outstanding at the end of September 2001 was about Rs 125 bn. So orders is definitely not the problem. To be fair to Bhel, the cyclicality of the power projects makes it rather difficult to give a stable performance in each quarter. However, these arguements may not go down well with investors.

    At the current price of Rs 149 the stock trades at a P/E of 6x annualised 2QFY02 earnings.

     

     

    Equitymaster requests your view! Post a comment on "Bhel: The see-saw continues". Click here!

      
     

    More Views on News

    BHEL: Margins Dip into the Negative (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The company also saw order inflows of Rs 18 billion during the quarter, which was a massive 41% YoY lower than the previous year's quarter.

    BHEL: The Somber Performance Continues (Quarterly Results Update - Detailed)

    Jun 16, 2017

    BHEL has announced fourth quarter results for the financial year 2016-2017 which has seen its fortunes continue to decline.

    BHEL: Project Execution Up, Inflows Down (Quarterly Results Update - Detailed)

    Feb 13, 2017

    BHEL has announced third quarter results for the financial year 2016-2017. The company has reported an 18% YoY growth in sales, and a Rs 875 million net profit during the period. Here is our analysis of the results.

    Cummins Ltd: Domestic Revenues the Saving Grace (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The domestic economy continues to grow largely in areas which are positively impacted through continuing government investments in infrastructure.

    ABB: Large Orders Remain Muted (Quarterly Results Update - Detailed)

    Aug 2, 2017

    Decisions on government initiatives and private investments were stalled in anticipation of upcoming tax restructure.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    BHEL SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK BHEL

    BHEL 5-YR ANALYSIS

    Detailed Financial Information With Charts

    COMPARE BHEL WITH

    MARKET STATS