Shares of Bharat Heavy Electricals Limited (BHEL) were trading 9.5% lower in early trade after the state-run engineering firm posted weak set of numbers for the fourth quarter.
The company reported a consolidated net loss of Rs 1,468.35 crore for FY20 against a net profit of Rs 1,002.42 crore in FY19. Total income decreased to Rs 22,054.31 crore from Rs 31,102.90 crore in the previous fiscal, BHEL said.
Following the result update, BHEL stock price opened with a loss of 7.63% today and later fell to an intraday low of Rs 28.45, falling 9.54% on BSE.
BHEL stock price currently trades higher than its 20 and 50-day but lower than its 5, 100 and 200-day moving averages.
The stock has fallen 32% since the beginning of this year. Market capitalisation of the firm stood at Rs 10,219.86 crore.
For the fourth quarter, BHEL posted a net loss of Rs 1,534 crore compared to net profit of Rs 676 crore in the corresponding quarter last year. Total income fell to Rs 5,198 crore in Q4FY20 from Rs 10,492 crore in Q4FY19, while total expenses declined to 5,906 crore from Rs 9,217 crore in the same period.
The company's board in its meeting held on Saturday did not recommend any final dividend for 2019-20 due to the ongoing coronavirus crisis.
"Broadly the impact of revenues is Rs 4,000 crore. Based on internal and external information up to the date, the company expects to recover the carrying amount of its assets, investments, trade receivables, contract assets and inventories," BHEL said in a note.
Nirmal Bang in its research note has rated 'sell' to the stock, at the target price of Rs 25, with 20% downside and said," Being a large EPC firm BHEL is likely to face execution difficulties in FY21E due to lockdown, labour migration and weak financial health of SEBs. The challenging times for BHEL is likely to continue on account of lower order inflow traction, subdued execution, margin pressure and high receivables."
While Kotak Institutional Equities suggested reduce rating for the stock, AMP securities have suggested Hold rating for the stock. Motilal Oswal has kept Neutral rating on the stock, at the TP of Rs 22, with 22% downside. On the contrary, Emkay has kept Buy rating with a TP of Rs 27 on the public sector stock.
Nomura also deducted Rs 5 per share for unfunded defined benefit pension liabilities to arrive at a lower TP of Rs 26, implying 16% downside potential. The research firm maintained its 'Reduce' rating for the stock and said,"We estimate that BHEL would continue to witness OCF (operating cash flow) outflows not only in FY21F but possibly also in FY22F. We expect BHEL to be in net debt position in FY22F, even allowing for some recovery from debtors in FY21F."
Jeferries and Morgan Stanley have also kept Underperform and Unwderweight on the share price of BHEL.