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Nirmal Bang Report
Bharat Heavy Electricals Ltd. posted 56% YoY decline in Q1 FY21 revenue at Rs 19.9 billion, 5% above our estimate, but 21% below consensus estimate.
Power segment revenue declined 68% YoY to Rs 11.2 billion (59% of total sales) while Industry segment revenue fell 15% YoY to Rs 7.8 billion (41% of total sales).
Gross margin fell to 34.1% (versus 42.5% YoY). Lower revenue led to negative Ebitda of Rs 10.6 billion (versus negative Rs 2.7 billion YoY). The loss was higher than our/consensus estimate loss of Rs 7.2 billion/Rs 6.8 billion.
Profit before tax was negative Rs 11.9 billion. With deferred tax write-back of Rs 3 billion, net loss stood at Rs 8.9 billion (versus loss of Rs 2.2 billion YoY).
Net loss was higher than our/consensus estimate loss of Rs 6.3 billion/Rs 6.5 billion.
Order inflow was muted at Rs 14.9 billion, down 62% YoY while order backlog was flat YoY/QoQ at Rs 1,081 billion.
BHEL witnessed improvement in execution in Q2 FY21 while it expects normalisation by Q3 FY21.
The company had floated a global expression of interest, inviting firms to partner with it and leverage its manufacturing capabilities and facilities.
BHEL has received 70 EOI responses and has signed three memorandum of understandings in the field of transportation, marine defence and armour trucks but discussions are in preliminary stages and would take time to materialise.
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