Reliance Money has recommended a reduce rating on Bharat Heavy Electricals with a target price of Rs 1437 in its April 13, 2009 research report.
“Bharat Heavy Electricals, BHEL has started FY10E on impressive order backlog of Rs 1170 billion which is 4.3x of FY09 revenue. The company witnessed impressive order inflows of Rs 596 billion in FY09 and the management remains confident about the order inflow of Rs 500 billion in FY10E. We believe the company would continue to perform well in FY10E and would maintain its market share atleast for next 2-3 years. We also view BHEL initiative in nuclear power and super critical segment as key positives for future growth.”
“Although we remain positive on the long term prospects of the company and considering the order book position we remain confident about its earnings growth as well, but as the stock trades at high multiple of 17x on FY10E we believe the stock is fairly valued at this price and thus we recommend a ‘Reduce’ with same target price of Rs 1437,” says Reliance Money’s research report.
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