BHEL Q3 Results Outlook: Robust Order Book and Improved Execution Expected to Boost Margins

By Amar

Synopsis: Bharat Heavy Electricals Ltd (BHEL) is poised to announce its financial results for the quarter ending December 31, 2024. Analysts forecast significant year-over-year (YoY) and quarter-over-quarter (QoQ) growth in revenue and net profit, driven by robust order inflows and enhanced execution capabilities. 


BHEL Q3 Results Outlook: Robust Order Book and Improved Execution Expected to Boost Margins



Kotak Institutional Equities anticipates BHEL's net sales to reach ₹6,785.9 crore, marking a 23.3% YoY and 3.1% QoQ increase.


The firm projects EBITDA at ₹423.2 crore, reflecting a 95.4% YoY and 53.9% QoQ rise, with margins expanding over 200 bps to 6.2%.


Net profit is expected to be ₹189.3 crore, a 62.3% YoY and 95.8% QoQ surge.


Kotak maintains a 'sell' rating with a target price of ₹110 per share.


JM Financial estimates net sales of ₹6,617.5 crore, up 25% YoY and flat sequentially.


EBITDA is projected at ₹304.2 crore, up 40% YoY and 11% QoQ, with margins improving by 40 bps to 4.6%.


The firm forecasts a net profit of ₹145 crore, a 140% YoY and 37% QoQ increase, and holds a 'buy' rating on the stock.


Antique Stock Broking forecasts sales of ₹6,997.9 crore, a 27% YoY and 6% QoQ rise.


EBITDA is expected at ₹349.9 crore, up 62% YoY and 27% QoQ.


Net profit is projected at ₹158 crore, a 241% YoY and 63% QoQ surge.


Antique maintains a 'buy' rating with a target price of ₹364, citing BHEL as a top pick in the industrial sector.


Market Performance:


On Tuesday, BHEL's shares declined over 2% to ₹190, bringing its market capitalization below ₹66,500 crore.


The stock had closed at ₹194.35 in the previous session and has fallen more than 43% from its 52-week high of ₹335.40 in July 2024.


Conclusion:


Analysts are optimistic about BHEL's Q3 FY2024-25 performance, expecting substantial improvements in revenue and profitability due to a strong order book and effective execution.


However, the extent of margin expansion remains a point of debate.


Investors should closely monitor management's insights on order book status, execution plans, and sectoral contributions to assess the company's future growth trajectory.


Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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