BHEL slumps 6%, Credit Suisse cuts target price to Rs 99

BHEL shares plunged more than 6 percent intraday Wednesday, continuing for the second consecutive session. Credit Suisse has an underperform rating on the stock. The brokerage house also cut its target price on the stock to Rs 99 from Rs 164 apiece, citing deteriorating orderbook and power inflow concerns. Credit Suisse says that revenue de-growth was seen in past three quarters and margin declined sharply in first quarter (April-June) of FY14, but the risk-reward is still favourable, it adds. The brokerage house cut FY14 & FY15 order inflow estimate by 6 percent and 20 percent, respectively. It also trimmed long-term market share estimate to 25 percent. State-owned capital goods company's first quarter standalone net profit halved to Rs 465.4 crore from Rs 920.9 crore in a year ago period, dented by weak power segment performance, despite higher other income. Net sales dropped 23.7 percent to Rs 6,352.5 crore in April-June quarter from Rs 8,326.2 crore in corresponding quarter of last fiscal and operating profit margin plunged 890 bps year-on-year to 4.5 percent during the quarter. The stock was down 2.41 percent to Rs 109.35 on the Bombay Stock Exchange at 11:23 hours IST. It lost 30 percent in past one month and more than 50 percent in one year. ref: http://www.moneycontrol.com/news/buzzing-stocks/bhel-slumps-6-credit-suisse-cuts-target-price-to-rs-99_941616.html