Bharat Heavy Electricals (BHEL) share price declined 2 percent intraday on November 14 after the company reported lower-than-expected revenue in September quarter due to weak power business.
The stock lost more than 21 percent in last one year. It was quoting at Rs 53.80, down Rs 0.75, or 1.37 percent on the BSE at 1215 hours IST.
Revenue during the quarter fell 8.2 percent year-on-year to Rs 6,225.7 crore, continuing decline for second consecutive quarter. Topline was expected at Rs 6,6612 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Power segment revenue declined 18 percent YoY but its EBIT margin expanded 200bps. Industry segment registered a 24 percent YoY growth in revenue, but saw 180bps contraction in margin YoY.
At operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 10.8 percent YoY to Rs 266.9 crore as other expenses fell 44 percent YoY.
Net profit in Q2FY20 plunged 36 percent to Rs 118.6 crore compared to year-ago as depreciation and finance cost increased significantly.
While maintaining buy call on the stock with a target of Rs 67, CLSA said execution has been picking up but not enough.
“Sales grew by 37 percent QoQ despite a monsoon-hit in Q2. Backlog grew 1 percent QoQ on strong Q2 order inflow,” said the brokerage which sees government looking to unlock value by cutting stakes.
CLSA cut its FY20 EPS estimate by 16 percent on weak first half of FY20.
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News Source: Moneycontrol