Robust earnings, strong order book make Bhel attractive

For FY10, Bharat Heavy Electricals Ltd (Bhel) announced revenue of Rs34,100 crore (up 22%), profit before tax (PBT) of Rs6,350 crore (up 31.3%) and net profit of Rs4,290 crore (up 36.6%). While revenue is in line with our estimates, PBT is 6% below our expectation.

Tax rate declined to 32.5% in FY10 against our estimate of 35%; net profit is just 2.4% below our estimate. For the fourth quarter of FY10, revenue was Rs13,950 crore (up 25.3% year-on-year, or y-o-y), PBT was Rs2,660 crore (up 27% y-o-y) and net profit was Rs1,890 crore (up 40% y-o-y).

FY09’s fourth quarter results included gratuity provisions of Rs330 crore and Sixth Pay Commission arrears of Rs44.3 crore; adjusted net profit is up 18.8% y-o-y. While the revenue is in line with our estimate, PBT is 13.1% lower than our estimate and net profit is 5.2% below estimates. The tax rate for the fourth quarter of FY10 was 29.1% against our estimate of 35%. We await further details on the adjustments and also the composition of cost, earnings before interest, tax, depreciation and amortization (Ebitda) margin, other income, etc.

more at:
http://www.livemint.com/2010/04/06211135/Robust-earnings-strong-order.html