BHEL's share price to fall further after disappointing Q4 earnings: here is why
State-run BHEL's consolidated net loss widened to Rs 2,699.70 crore in the financial year 2020-21. Looking at the 4QFY21 earnings, Motilal Oswal Institutional Equities stated BHEL reported a disappointing 4QFY21 earnings as revenue came in 29 per cent below the estimate.
"Higher fixed cost dented operating performance, with the operating loss attributable to under-absorption of costs," Motilal Oswal Institutional Equities stated. "In spite of the management's ongoing efforts, we expect receivables to remain elevated in the near future. Order inflows remained weak, with a 31 per cent-43 per cent YoY decline in 4QFY21."
It has pegged the stock value at Rs 40 per share. The share of BHEL closed at Rs 67.35 per share on June 14 (today), down by 11.61 per cent. The previous closing of its share was Rs 76.20 apiece.
It now estimates BHEL's FY22E to be loss making and reduces the FY23E EPS estimate by 36 per cent. While orders are few and far between, the pricing environment remains highly competitive, limiting scope for margin expansion.
For the quarter ended March, state-owned BHEL's consolidated net loss narrowed to Rs 1,036.32 crore, mainly on the back of higher revenues.
The company's consolidated net loss had stood at Rs 1,532.18 crore in the quarter ended on March 31, 2020, according to a regulatory filing.
Total income during January-March 2021, rose to Rs 7,245.16 crore, from Rs 5,166.64 crore in the year-ago period.
However, in the full financial year 2020-21, the company's consolidated net loss widened to Rs 2,699.70 crore as compared with Rs 1,468.35 crore in 2019-20