Multibagger stock: BHEL reports below estimate Q4 nos; stock slips; here is what brokerages suggest

BHEL share price: Bharat Heavy Electrical Ltd (NSE: BHEL) shares slipped after global brokerages revised their stance on the stock. The revision came soon after the company reported below-than-estimated Q4FY24 numbers, on Tuesday after market hours. 

At around 10:36 a.m.,shares of BHEL were down 4.18 per cent or Rs 13.35 at Rs 305.85. The market capitalisation of the company at around the same time stood at Rs 1,06,429.27 crore.

Brokerage view on BHEL

Morgan Stanley maintained an 'equalweight' rating on BHEL and gave a target of Rs 220 apiece. As per the brokerage even though the Q4 earnings were below estimates, earnings visibility is improving with strong orders and a healthy prospect pipeline. However, it added a depleted vendor base, and extending attractive terms is a key risk.

Meanwhile, CLSA continued with 'sell' and raised the target to Rs 189 from Rs 135 apiece. 

Anil Singhvi's view 

Zee Business Managing Editor Anil Singhvi has recommended selling futures of BHEL for targets of Rs 310, Rs 302, and Rs 295, keeping the stop loss at Rs 324 apiece. 

As per Singhvi, Q4 results are below estimates and execution is poor. Further, he said that the company has weak cash flow and working capital management but a very strong order book. Additionally, the stock has already gained over 38 per cent in three months and 300 per cent in one year

"From a long-term investment perspective, investors should only buy the stock if it slips more than 10 per cent," said Anil Singhvi. 

How did BHEL fare in Q4?

State-owned BHEL on Tuesday reported an over 25 per cent decline in its consolidated net profit to Rs 489.62 crore in the March quarter, mainly due to higher expenses.

Its consolidated net profit stood at Rs 658.02 crore in the quarter ended on March 31, 2023, according to a regulatory filing.

Total expenses of the firm rose to Rs 7,794.11 crore in the quarter from Rs 7,411.64 crore in the same period a year ago.

Total income in the quarter rose marginally to Rs 8,416.84 crore in the quarter from Rs 8,338.61 crore in the year-ago period.

Its consolidated net profit in the fiscal 2023-24 also declined to Rs 282.22 crore from Rs 654.12 crore in 2022-23.

Total income in the fiscal increased marginally to Rs 24,439.05 crore from Rs 23,853.57 crore in 2022-23.

BHEL dividend 

The board has recommended a final dividend at the rate of 12.50 per cent or 25 paise per share with a face value of Rs 2 each on paid-up share capital of the company for the fiscal year 2023-24, it stated.

BHEL share price: Past performance 

In a year, shares of BHEL have given a multi-bagger return of over 302 per cent against Nifty50's rise of over 23 per cent.

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