BHEL Q1 results preview: Will this multibagger PSU pull off a surprise today?

State-owned multibagger firm Bharat Heavy Electricals (BHEL) is set to report its results for the quarter ended on June 30, 2024 on Wednesday, July 31. Brokerages tracking the stock are not very much positive on the counter, with some analysts expecting the company to report losses for the first three months of FY25.
 

Analysts expect the company's revenue to rise on a year-on-year (YoY) basis but a sharp fall is penciled on a quarter-on-quarter (QoQ) basis. However, some of them see it to report positive numbers in the bottomline and operational front citing incremental revenues. Latest order book value and management commentary will be key factors to watch out.
 

Kotak Institutional Equities pegs BHEL's revenue at Rs 5,729.4 crore, up 14.5 per cent YoY but falling 30.6 per cent on a sequential basis. Ebitda loss may come in at Rs 275 crore, better than previous year while Ebitda margin is seen tumbling 1,360 bps on a QoQ comparison. Adjusted net loss may come in at Rs 328 crore, which was Rs 351.7 crore a year ago.
 

"We expect 15 per cent YoY improvement in revenues driven by power and industrial segments. We expect negative Ebitda margin in a seasonally weak quarter and factor in gross margin at FY24 full-year levels," said Kotak. The brokerage currently has a 'sell' rating on the stock with a target price of Rs 75 on the stock.
 

Phillip Capital expects BHEL to report a net loss of Rs 265.3 crore, which was a net profit of Rs 484.4 crore in the March 2024 quarter. Revenues may come in at Rs 5,054.1 crore, falling 39 per cent YoY and flat sequentially. Ebitda loss is seen at Rs 227.4 crore with Ebitda margins contracting 1331 basis points on a yearly basis.
 

Phillip Capital expects sales growth of 5 per cent while Q1 seasonality is likely to result in Ebitda loss due to legacy orders. The brokerage will be looking for the outlook on ordering for BTG in FY25, progress on legacy contract execution and reduction in contract assets on their balance sheet.
 

Shares of Bharat Heavy Electricals Ltd tumbled more than 1.52 per cent to Rs 312.50 during the trading session on Wednesday, with its market capitalisation falling below Rs 1.1 lakh crore mark. The stock had settled at Rs 317.35 in the previous trading session on Tuesday.
 

Prabhudal Lilladher (PL) sees BHEL's revenue coming at Rs 6,221.9 crore, up 24.4 per cent YoY but falling 25 per cent sequentially. Ebitda may come in at Rs 217.8 crore, falling nearly 70 per cent on a QoQ basis with Ebitda margins coming in at 3.5 per cent. Adjusted net profit may be reported at Rs 78.7 crore, crashing 84 per cent on a sequential basis.
 

"We expect BHEL’s revenue to grow 24 per cent YoY, with healthy execution across both power and industry segments. Ebitda margin is estimated to come in at 3.5 per cent led by pick up in execution. The company recorded strong order intake this quarter, including Rs 13,300 crore for Koderma Phase II from DVC and two contracts worth Rs 7,000 crore from Adani Power," PL said.