Earnings Outlook
BHEL Jul-Sept revenue seen up 17% YoY, losses narrowed
This story was originally published at 13:44 IST on 16 October 2024
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By Narayana Krishna
HYDERABAD - Backed by a robust order book from the power sector, Bharat Heavy Electricals Ltd. is likely to report a 17% year-on-year rise in its revenue for the Jul-Sept quarter to INR 59.8 billion, according to an average of estimates from four brokerages. However, the engineering and capital goods major is expected to continue reporting losses, though these are likely to narrow compared with the same period last year. The company's net loss for the September quarter is seen at INR 1.7 billion, the estimates show. In Jul-Sept last year, BHEL reported a net loss of INR 2.3 billion on revenue of INR 51.3 billion.
Analysts' estimates for BHEL's net loss vary significantly, with Prabhudas Lilladher predicting the lowest loss at INR 424 million, while Nuvama Wealth expects the highest loss at INR 3.6 billion. On the revenue front, Nuvama Wealth gave the lowest estimate of INR 55.8 billion, while Prabhudas Lilladher gave the highest of INR 62.4 billion.
Among the four brokerages, Prabhudas Lilladher expects BHEL to achieve break-even with positive earnings before interest, taxes, depreciation, and amortisation of INR 125 million for the quarter, aided by power sector orders and execution. "We expect BHEL's revenue to grow 22% year-on-year with healthy execution across both power and industry segments. EBITDA margin is expected to improve by 780 basis points to break-even, aided by employee cost leverage and administrative costs," Prabhudas Lilladher said in its pre-earnings note.
BHEL booked fresh orders worth INR 305 billion during Jul-Sept, the majority of which came from the thermal power sector. Kotak Institutional expects 21% year-on-year improvement in revenues, driven by the power and industrial segments, while the EBITDA margin is seen negative at (-)2.1%, a decline of 453 basis points year-on-year.
The company is set to declare its Jul-Sept results on Oct. 28. Market participants will watch closely for the overall execution pace of the current order book and the outlook for future orders, given the government's focus on increasing power generation capacity. Analysts will also be looking for order visibility from sectors like railways, defence, coal, and transmission segments.
At 1228 IST, shares of BHEL traded at INR 269.80 on the National Stock Exchange, down 0.7% from the previous close. Following are the Jul-Sept earnings estimates for Bharat Heavy Electricals Ltd. based on reports from four brokerage houses:
Broker name | Net Sales | Net Profit/Loss | EBITDA Gain/Loss |
-------(In INR million)------- | |||
Antique Stock Broking Ltd | 58,900.00 | (-)670.00 | (-)295.00 |
Kotak Institutional Equities | 62,023.00 | (-)2,012.00 | (-)1,286.00 |
Nuvama Wealth Management Ltd | 55,816.00 | (-)3,560.00 | (-)3,907.00 |
Prabhudas Lilladher Pvt Ltd | 62,426.00 | (-)424.00 | 125.00 |
Average | 59,791.25 | (-)1,666.50 |
|
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Namrata Rao
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