BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Bharat Heavy Electricals Ltd.’s Q1 FY21 earnings were disappointing as revenue was 26% below our estimates.
Higher fixed cost dented operating performance, with almost approximately 70% loss posted at the profit before tax level, attributable to under-absorption of costs.
The company is yet to show any significant improvement in pending receivables, with total debtors at Rs 360 billion.
In spite of the company’s ongoing efforts, we expect the receivables position to remain elevated in the near future. Order inflows, which declined 62% YoY, were impacted significantly by Covid-19 led lockdown.
We now expect BHEL to report loss in FY21E and have also reduced our FY22E earnings estimate by 21% to factor poor execution and a weak ordering environment.
While orders are few and far between, the pricing environment remains highly competitive, limiting scope for margin expansion.
While the company has received Expression of Interest (EoI) from three major original equipment manufacturers regarding its ongoing diversification drive, we believe any material financial impact is still some time away.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
As a Subscriber you get
Stories
RECOMMENDED FOR YOU
POPULAR