Bhel’s June quarter results lead to derating

Bharat Heavy Electricals Ltd (Bhel), one of the bellwether stocks in the capital goods sector, has reported dismal results for the June quarter. At the end of the March quarter, the company seemed to be sitting pretty with an order book of Rs. 1.64 trillion, or close to four times its annual revenue. The firm had also told analysts that it expects revenue to grow 20% in the current fiscal year, which had then seemed to be an easily achievable task.

In that backdrop, analysts tracking the firm had estimated revenue growth of 20-26% in the June quarter. Instead, Bhel reported a year-on-year growth of 10%. Clearly, the rate at which the company executed orders in the March quarter is a matter of concern.

But the bigger worry is the rate at which it is winning orders. Order inflows last quarter stood at merely Rs. 2,400 crore, according to an analyst who attended the company’s “by invitation only” post-earnings conference call. Bhel’s order book, in fact, fell marginally to Rs. 1.6 trillion, compared with the March quarter.

more at:
http://www.livemint.com/2011/07/26222807/Bhel8217s-June-quarter-resu.html