BHEL, a government owned entity, is India's largest engineering company and dominates the supply of equipment for power plants in India. Key products include gas turbines, generators, thermal sets, diesel shunters, turbo / hydro sets, transformers, switch gears, circuit breakers and boilers.
Apart from conventional power plants (thermal, hydro & gas), BHEL
has been contributing significantly to the development and promotion of solar energy over the past three decades. BHEL
offers EPC solutions for grid-interactive and off-grid, ground mounted, rooftop, floating and canal top solar plants, with a current solar portfolio of more than 1 GW. In addition, BHEL
is also manufacturing space-grade solar panels and batteries for space applications.
“Atmanirbhar Bharat” enables localization of equipments supported by BHEL’s strategy to partner with Global OEMs to leverage manufacturing facilities remains a positive catalyst going forward. However, Geojit Financial Services remains cautious on the stock amid the ongoing weakness in operations.
"Considering the company’s focus on new growth opportunities and operational efficiencies, we believe, once the impact of pandemic fades away, the business would get back to normalcy. However, the increase in demand of renewables sources of energy can impact the company’s business model. Hence, we plan to monitor the performance," the brokerage firm said in Q3FY21 result update.
Meanwhile, according to Motilal Oswal Financial Services, BHEL is expected to post consolidated profit of Rs 820 crore for the quarter ended March 2021 (Q4FY21), aided by higher operating leverage and lower interest cost. The company had posted net loss of Rs 1,532 crore in Q4FY20.
Besides, it is expected to witness strong revenue growth (100 per cent YoY) – as the company was disproportionately impacted by the COVID outbreak in March 2020 and has witnessed a skewed Q4 in general. "BHEL is expected to report operating profit (after four quarters of operating losses) on the back of higher execution and ongoing cost rationalization," the brokerage firm said in March 2021 results preview.
Earnings before interest, taxes, depreciation, and amortization (Ebitda) to come in at Rs 1,140 crore, with sequential and YoY improvements, on higher operating leverage. Watch out for any movement in receivables, ramp-up in operations, and order inflow, it said.
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