BHEL – a Power Value Play

BHEL

CMP – 175

BHEL has met and exceeded expectations of upside from the recommendation made at Rs 116 levels.

It also has a long way to go on the upside too.

JM - JainMatrix Investments

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  • Date 7-Aug-13
  • CMP: Rs 116
  • Large Cap – Mkt Cap 28,300 crores
  • Advice: Buy with a 2-3 year perspective

Here is a short note on BHEL (Bharat Heavy Electricals Ltd)

JainMatrix Investments

Introduction

  • BHEL is an integrated power plant equipment manufacturing and implementation firm.
  • Its turnover in FY2013 was 48,000 crores, with profits at 6,600 cr. It has achieved Maharatna PSU status in 2013, which allows it greater operational freedom. Market Capitalization today is 28,300 cr, at CMP 116.
  • The manufacturing capacity is now 20,000 MW per annum, highest among all power-equipment vendors in India. It has a 59% share in Indian installed generating capacity contributing 69% to the total power generated.
  • Orders booked backlog is 1,10,000 cr, which is 2.3 times current revenue. This should tide it through the current slowdown. Core business is slow today but the manufacturing and execution strengths are immense.
  • Business is from sectors like Power Generation and Transmission…

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