In a chat with ET Now, Paras Adenwala, MD & Principal Portfolio Manager, Capital Portfolio Advisors, talks about the outlook of BHEL and Petron Engineering.
What is your sense on BHEL and Petron Eng?
My theme is clearly to buy BHEL because it's at a steep discount to L&T. Although the business models are not comparable, traditionally we have seen that both BHEL and L&T move in tandem in terms of valuation multiples. There have been several times when BHEL quotes at a premium to L&T. Today BHEL is available at just about 15.5-16 times on FY12 basis, while L&T is roughly about 20-21 times and such a huge gap between the valuations of both these majors is unwarranted, and therefore, I expect this gap to be breached. Therefore, BHEL makes a very compelling buy for about 25-30% return over the next one year.
more at:
http://economictimes.indiatimes.com/markets/stocks/views/recommendations/Expect-20-25-return-on-BHEL-in-1-year/articleshow/6158830.cms
Tuesday, July 13, 2010
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