bharat heavy electricals ltd-q4fy11 result update
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8/6/2019 Bharat Heavy Electricals Ltd-Q4FY11 Result Update
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Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.Email: wealthresearch@uniconindia.in
LONG TERM INVESTMENT C ALL
Buy 24 May 2011
Company Report | Q4FY11 Result Update
Q4FY11 Result Highlights
Bharat Heavy Electricals Ltd (BHEL) top-line came marginally aboveUnicon’s estimates but operating profit and net profit was in line withour estimates.
Revenue at INR 183.8bn was higher by 31.9% on yearly basis. Growthin revenue was backed by 35.8% yearly growth in its Power businessand 17.8% in Industry segment. Revenue from Power and Industry isINR 151bn and 37bn respectively for the quarter under review. Theoperating profit margin at 23.4% was well above our estimates andexpanded by 276bps on yearly basis. In absolute terms, the operating
profit at INR 42.9bn was higher by 49.5% on yearly basis. The higheroperating profit margin was due to lower raw-material consumptioncost and staff cost as percentage of sales. During the quarter underreview, the interest outgo increased by 71% to INR 305Mn on yearly basis, due to higher working capital cycle and higher cost of fund.The net profit after tax at INR 27.9bn was higher by 46.5% (YoY). Thecompany has changed its accounting policy with regard to theprovisions of warranty, leave liability of employees and depreciationfor few of its asset class.
Order-book update
The current order-book of the company stands at INR 1.64tn andmanagement guides for ~5-10% growth in its order book during FY12.BHEL is L2 in NTPC’s bulk tender of 11x660MW turbine generatorand is expected to get 4/5 turbine-generator orders. Given the strongpipeline of power projects by private sector and likely order awardfrom the NTPC, the target looks achievable.
Other update
Company has announced that 5% of its paid up equity would bedivested by the GoI and face value (Rs 10/share) of its share would besub-divided into 5 equity shares of Rs 2 each.
Outlook & Valuation
At the CMP, stock trades at 12x its FY13e. Despite over hang remainsas to the likely FPO and concerns over incremental order-bookgrowth in the near term, we believe, stock currently trades atattractive valuation on price to earning multiple, and given the soundorder-book and RoE of ~30% on consolidated basis for FY11, Buy.
Industry Capital Goods
CMP (INR) 1,947Target (INR) 2,600
Upside / (Downside) (%) 33%52 week High/Low (INR) 2,694 / 1901
Market Cap (INR BN) 953
3M Avg. Daily Vol (‘000) 838P/E (FY13e) 12
Shareholding Pattern (%)
Promoters
67%
Institutions26%
Non
Institutions6%
Stock Performance
1900
2050
2200
2350
2500
2650
2800
2950
M a y
J u n
J u l
A u g
S e p
O c t
N o v
D e c
J a n F e b
M a r
A p r
BHEL NSE Nifty
Performance (%)
1MMonth
3Months
1 Year
Company -6.2% -7.8% -16.1%
NIFTY -8.5% -1.3% 9.0%* Source: Capitaline(INR in Mn)
Particulars Actual EstimatesTotal Income 183,805 171,129EBIDTA 42,936 42,043Reported PAT 27,980 26,183* Source: ACEEquity, Unicon Research
AnalystFalgesh Sanghvi | fsanghvi@uniconindia.in
8/6/2019 Bharat Heavy Electricals Ltd-Q4FY11 Result Update
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Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.Email: wealthresearch@uniconindia.in
Summarized Income statement (Standalone) (INR in mn) Q4FY11 Q4FY10 YoY FY11 FY10 YoY
Income from Operation 183,805 139,446 31.8 424,955 335,728 26.6Total Expenditure 140,869 110,718 27.2 335,328 273,145 22.8EBITDA 42,936 28,728 49.5 89,627 62,583 43.2EBITDA (%) 23.4 20.6 276 bps 21.1 18.6 245 bpsDepreciation 1,384 1,647 - 5,441 4,580 18.8EBIT 41,552 27,081 53.4 84,186 58,003 45.1EBIT (%) 22.6 19.4 319 bps 19.8 17.3 253 bpsInterest 305 178 71.3 547 335 63.3Other income 1,634 2,080 - 6,418 8,239 -PBT 42,881 28,983 48.0 90,057 65,907 36.6PBT (%) 23.3 20.8 255 bps 21.2 19.6 156 bps
Tax Provision 15,678 10,475 30,759 23,192Prior period tax (777) (588) (814) (392)Net Profit 27,980 19,096 46.5 60,112 43,107 39.4Net Profit (%) 15.2 13.7 153 bps 14.1 12.8 131 bps
EPS 57 39 123 28
Expenditure Break-up and analysis Q4FY11 Q4FY10 YoY FY11 FY10 YoYChange in Stocks and WIP 6,669 (248) (1,273) (7,867)Consumption of raw materials 82,932 80,520 11.6 226,707 200,941 16.8
% of Sales 48.7 57.6 -882 bps 53.0 57.5 -446 bpsStaff Cost 14,599 18,338 - 54,104 52,433 3.2
% of Sales 7.9 13.2 -521 bps 12.7 15.6 -289 bps
Other expenditure 36,669 12,108 202.8 55,790 27,638 101.9% of Sales 19.9 8.7 1127 bps 13.1 8.2 490 bps
Segment Performance Q4FY11 Q4FY10 YoY FY11 FY10 YoYPower 151,444 111,549 35.8 347,914 268,607 29.5
PBIT (%) 27.3 27.4 -10 bps 23.9 23.5 37 bpsIndustry 37,091 31,491 17.8 91,860 78,790 16.6
PBIT (%) 26.6 25.6 100 bps 20.8 20.8 0 bpsSource: Company, Unicon Research
8/6/2019 Bharat Heavy Electricals Ltd-Q4FY11 Result Update
http://slidepdf.com/reader/full/bharat-heavy-electricals-ltd-q4fy11-result-update 3/3
Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.Email: wealthresearch@uniconindia.in
Unicon Investment Ranking Methodology
Rating Buy Accumulate Hold Reduce Sell
Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%
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