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Please refer to important disclosures at the end of this report 1
(` cr) 3QFY11 3QFY10 % chg (yoy) 2QFY11 % chg (qoq)
Revenues 9,023 7,229 24.8 8,491 6.3
EBITDA 2,072 1,562 32.7 1,632 26.9
EBITDA margin (%) 23.0 21.6 140bp 19.2 380bp
Reported PAT 1,403 1,073 30.8 1,142 22.8
Source: Company, Angel Research
BHEL’s 3QFY2011 results were ahead of our expectations, largely aided by margin expansions at the EBIDTA and PAT levels. The numbers were positively impacted by the one-off adjustment in turnover, PBT and PAT arising on account
of modifications in the method of calculating the percentage completion forrevenue recognition. Inclusive of the above adjustments, BHEL’s revenue grew by 24.8% yoy, while PAT increased by 30.8% yoy. We maintain our Neutral view on
the stock.
Strong growth with impressive margins: For 3QFY2011, the company’s revenueposted a robust growth of 24.8% yoy to ` 9,023cr. EBITDA also increased by 32.7% yoy to ` 2,072cr on the back of the 136bp yoy improvement in margin to23%. The margin improvement was mainly facilitated by the sharp decline in rawmaterial costs, which contracted to 55.8% (58.8%) yoy. Staff cost also fell to14.9% of revenues compared to 17% during the corresponding period of theprevious year. Other expenses rose sharply by 59% yoy to ` 793cr (` 499cr) mainly on account of the ` 100cr provisioning for liquidated damages. Strong growth
coupled with higher margins led to the 30.8% yoy growth in PAT to ` 1,403cr.Excluding the one-off adjustments, the growth in turnover and PAT stood at 18.7%and 25.2%, respectively.
Outlook and valuation: The Indian power equipment industry is undergoingstructural changes post the increasing preference for fuel-efficient andsupercritical technologies. Given the growth prospects in the domestic powersector, few Indian companies have set up or have initiated the process of settingup local manufacturing facilities in collaboration with leading internationalplayers. As competition intensifies from both the domestic as well as overseasplayers, we do not expect BHEL to maintain its existing profitability margins andincrease its current market share in the long term. At the CMP of ` 2,218, thestock is quoting at 19.2x FY2011E EPS and at 15.7x FY2012E EPS. Given the
long-term structural concerns, we maintain our Neutral view on the stock.
Key Financials
Y/E March (` cr) FY2009 FY2010 FY2011E FY2012E
Net Sales 26,212 32,880 40,234 48,409
% chg 35.8 25.4 22.4 20.3
Net Profit 3,126 4,311 5,639 6,929
% chg 9.3 37.9 30.8 22.9
EBITDA (%) 13.9 16.9 19.1 19.5
EPS (`) 63.9 88.1 115.2 141.6
P/E (x) 34.7 25.2 19.2 15.7
P/BV (x) 8.4 6.8 5.5 4.4
RoE (%) 26.4 29.9 31.3 30.4RoCE (%) 28.9 33.3 33.1 32.1
EV/Sales (x) 3.8 3.0 2.4 1.9
EV/EBITDA (x) 23.7 17.8 11.5 9.2
Source: Company, Angel Research
NeutralCMP ` 2,218
Target Price -
Investment Period -
Stock Info
Sector Capital Goods
Market Cap (` cr) 1,08,551
Beta 0.8
52 Week High / Low 2,695/2,060
Avg. Daily Volume67,579
Face Value (` ) 10
BSE Sensex 19,008
Nifty 5,697
Reuters Code BHEL.BO
Bloomberg Code BHEL@IN
Shareholding Pattern (%)
Promoters 67.7
MF / Banks / Indian Fls 16.3
FII / NRIs / OCBs 14.1
Indian Public / Others 1.9
Abs. (%) 3m 1yr 3yr
Sensex (6.2) 11.5 8.0
BHEL (12.8) (3.5) 4.9
John Perinchery
+91 22 3935 7800 Ext: 6817
Hemang Thaker
+91 22 3937 7800 Ext: 6840
BHEL
Performance highlights
3QFY2011 Result Update | Capital Goods
January 21, 2011
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BHEL | 3QFY2011 Result Update
January 21, 2011 2
Exhibit 1: 3QFY2011 performance
(` cr) 3QFY11 3QFY10 % chg (yoy) 2QFY11 % chg qoq 9MFY11 9MFY10 % chg yoy
Net Sales 8,849 7,100 24.6 8,328 6.3 23,657 19,321 22.4
Other operating income 174 129 35.0 162 7.3 457.64 306.96 49.1
Total income 9,023 7,229 24.8 8,491 6.3 24,115 19,628 22.9
Value of Production 9,121 7,639 19.4 8,717 5 24,442 20,065 22
Stock adjustments (276) (553) (393) (794) (762)
Raw Material 5,086 4,495 13.1 5,357 (5.1) 14,378 12,042 19.4
(% of Value of Production) 55.8 58.8 61.5 58.8 60.0
Employee Cost 1,349 1,227 9.9 1,264 6.7 3,951 3,410 15.9
(% of sales) 14.9 17.0 14.9 16.4 17.4
Other Expenses 793 499 59.0 630 25.9 1,912 1,553 23.1
(% of sales) 8.8 6.9 7.4 7.9 7.9
Total Expenditure 6,952 5,668 22.7 6,858 1.4 19,446 16,243 19.7EBITDA 2,072 1,562 32.7 1,632 26.9 4,669 3,385 37.9
(EBITDA %) 23.0 21.6 19.2 19.4 17.2
Interest 14 7 109.7 6 144.0 24 16 54.3
Depreciation 145 104 39.4 134 7.9 406 293 38.3
Other Income 153 193 (20.9) 162 (5.6) 478 616 (22.3)
PBT 2,065 1,644 25.6 1,654 24.9 4,718 3,692 27.8
(% of sales) 22.9 22.7 19.5 19.6 18.8
Total Tax 662 572 15.8 512 29.3 1,504 1,291 16.5
(% of PBT) 32.1 34.8 31.0 31.9 35.0
Reported PAT 1,403 1,073 30.8 1,142 22.8 3,213 2,401 33.8
(% of sales) 15.6 14.8 13.5 13.3 12.2
Source: Company, Angel Research
Exhibit 2: Actual v/s Estimates
(` cr) Actual Estimates Var (%)
Revenue 9,023 9,398 (4.0)
EBITDA 2,072 1,692 22.5
PAT 1,403 1,135 23.6
EPS (` ) 28.7 23.2 23.6
Source: Company, Angel Research
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BHEL | 3QFY2011 Result Update
January 21, 2011 3
One-off adjustment positively impacts turnover and profit
As per the revenue recognition practice followed by the company, ~97.5% of the
realisable contract value is recognised as revenues during the execution period
and the balance 2.5% is recognised only after completion of the trial operations.
BHEL also follows the practice of providing for warranties @2.5% of the contract
value on completion of the trial operations. The above two practices entail
simultaneous recognition of residual revenues @2.5% of the contract value and
creation of corresponding warranty obligations @2.5% of the contract value only
after the trial operations are over.
During the past few quarters, it was observed that in few of the contracts,
aggregate revenues recognised during the execution period deviated from the
benchmark 97.5% on account of the variations in the total estimated cost and the
actual cost incurred. These deviations had a consequential impact on the
percentage of revenues that were recognised post completion of the trial
operations leading to a mismatch (ranging from 1% to 5%) vis-à-vis the
provisioning for warranties @2.5% of the contract revenue.
Management informed that the deviations of the past are insignificant to materially
impact the recognition policy and hence have not been adjusted. However, with
increasing ticket size of contracts, the aggregate of the deviations has the potential
to materially impact the revenue recognition vis-à-vis the provisioning for
warranties, and hence the method of calculating the percentage completion has
been modified to remove the above mismatch. This modification would ensure
compliance with the existing policy where only 2.5% of the contract revenue is
recognised on completion of the trial operations with corresponding provision for
warranties. Management informed that the revised methodology would be
applied for future reporting periods as well.
The above modification, which incidentally relates to the ongoing contracts of the
current and earlier periods, resulted in a one-off net increase in turnover by
` 444cr during 3QFY2011. On the profitability front, PBT and PAT increased to the
extent of ` 88cr and ` 60cr, respectively. Inclusive of the above adjustments, BHEL’s
revenue grew by 24.8% yoy, while PAT increased by 30.8% yoy. Excluding the
above adjustments, the growth in turnover and PAT was at 18.7% and 25.2%,
respectively.
Operational improvements drive down raw material cost:
Various operational improvement initiatives undertaken in the past such as design
to cost and focus on lean manufacturing have enabled the company to lower its
raw material consumption. Also, better buying practices and the long-term
contracts with the material suppliers have helped the company source its materials
at competitive rates. We also note that ~50% of the contracts have a built in price
variation clause with a pass-through mechanism. For the remainder of the
contracts, BHEL would continue to focus on optimising the raw material
consumption. For FY2011, management expects the raw material cost to hold
steady at 59-60% of sales similar to FY2010 levels.
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BHEL | 3QFY2011 Result Update
January 21, 2011 4
Exhibit 3: Segment-wise performance
Y/E March (` cr) 3QFY11 3QFY10 % chg (yoy) 9MFY11 9MFY10 % chg (yoy)
Revenues
Power 7,282 5,709 27.6 19,647 15,706 25.1
Industry 2,143 1,802 18.9 5,477 4,730 15.8
Total Revenues 9,425 7,511 25.5 25,124 20,436 22.9
EBIT
Power 1,632 1,309 24.7 4,175 3,259 28.1
Industry 454 405 12.1 930 838 11.0
Total EBIT 2,086 1,714 21.7 5,105 4,096 24.6
Revenue mix (%)
Power 77.3 76.0 78.2 76.9
Industry 22.7 24.0 21.8 23.1
EBIT Margin (%)Power 22.4 22.9 21.3 20.7
Industry 21.2 22.5 17.0 17.7
Total 22.1 22.8 20.3 20.0
Source: Company, Angel Research
Consistent performance by power segment: For 3QFY2011, the power division
continued to report strong growth of 27.6% yoy to ` 7,282cr (` 5,709cr), while the
industry division reported steady growth of 18.9% yoy to ` 2,143cr (` 1,802cr).
However, EBIT margin of the power division declined marginally by 50bp to
22.4%. For the cumulative period up to 9MFY2011, margins improved by 60bp
yoy to 21.3%. The industry division reported a 130bp dip in margin to 21.2%
during the quarter.
Steady margins coupled with strong revenue growth enabled the power division to
report 24.7% yoy growth in EBIT to ` 1,632cr, while the industry division reported
moderate growth of 12.1% yoy to ` 454cr due to the dip in margins. The
company’s long-term strategy would be to maintain a balanced order backlog and
revenue portfolio spread across the power and industry divisions in the ratio of
70:30.
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BHEL | 3QFY2011 Result Update
January 21, 2011 5
Order inflow: During 3QFY2011, the company’s order inflow fell by 21% yoy to
` 12,592cr. The power division accounted for ` 7,877cr, while the industrial and
export divisions accounted for ` 2,735cr and ` 1,980cr, respectively. Order backlog
at the end of 3QFY2011 stood at ~` 1, 57,611cr. Order inflow during 9MFY2011
aggregated to ` 36,524cr and remained nearly flat compared to corresponding
period of the previous year. Management has maintained its guidance of annual
order inflow to aggregate to ~` 60,000cr during FY2011.
Notable orders received during the quarter:
5X270MW Nashik Phase II (India bulls Power) ` 2,875cr
5X270MW Amravati Phase II (Elena Power) ` 2,883cr
1X600MW Rayalaseema Unit No 6 (APGENCO) ` 2,875cr
672MW Marib Phase II Gas Turbine ` 1,976cr
Exhibit 4: Order inflow
Source: Company, Angel Research
Exhibit 5: Order Backlog
Source: Company, Angel Research
1
4,500
1
4,350
15,107
15,580
12,4
00
8,000
16,000 22,614
10,82
4
13
,500
12,592
-
5,000
10,000
15,000
20,000
25,000
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
(` cr)
95,000
104,000
113,584
117,000
124,400
125,800
134,000
143,800
148,000
153,737
157,611
-
32,000
64,000
96,000
128,000
160,000
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
(` cr)
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BHEL | 3QFY2011 Result Update
January 21, 2011 6
Investment Arguments
Dominant player in the domestic power equipment market: BHEL is the largest
supplier of power equipment in India with a wide product portfolio consisting of
boilers, gas turbines, fabric filters, steam generators and switch gears, among
others. The company primarily caters to power-generating companies by offering
steam turbines, generators, boilers and matching auxiliaries of up to 800MW
rating, including super-critical sets of 660/800MW. The company has facilities that
can go up to 1,000MW of unit size. While competition is intensifying due to high
prospects in the power sector, BHEL continues to be strong, especially in the boiler
turbine generator (BTG) category, which forms a key part of the power plant. As a
fully integrated power equipment player, BHEL enjoys a strong domestic presence
in the power equipment market.
Well-positioned for future: The Indian power sector is likely to witness massive
capacity additions of ~150,000MW over the next decade. BHEL, being a
dominant domestic player, is expected to be the major beneficiary of the unfolding
opportunities in the power equipment space. Furthermore, the company is
augmenting its manufacturing capacity from the current 15GW to 20GW, after
having introduced new ratings of 150MW, 270MW, 525MW and 600MW in the
sub-critical segment and 660MW and 800MW in the super-critical segment.
Strategic tie-ups to enhance competitive edge: BHEL is taking various initiatives,
including strategic alliances through joint ventures (JV), in the supercritical
technology and technology-sourcing domains. To pursue inorganic growth, tie-ups
are being identified in the areas of: a) transmission, with a focus on 765kV and
1,200kV segments (JV with Toshiba for transmission products); b) photovoltaics
(PV), with a focus on manufacturing silicon wafers, solar cells, modules and setting
up a greenfield PV project, and c) nuclear, with a focus on building special nuclear
reactors for which GE-Hitachi has signed an agreement with NPCIL and BHEL.
Outlook and valuation
The Indian power equipment industry is undergoing structural changes post the
increasing preference for fuel-efficient and supercritical technologies. Given the
growth prospects in the domestic power sector, few Indian companies have set up
or have initiated the process of setting up local manufacturing facilities in
collaboration with leading international players. As competition intensifies from
both domestic as well as overseas players, we do not expect BHEL to increase its
current market share in the long term. At the CMP of ` 2,218, the stock is quoting
at 19.2x FY2011E EPS and at 15.7x FY2012E EPS. Given the long-term structural
concerns, we maintain our Neutral view on the stock.
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BHEL | 3QFY2011 Result Update
January 21, 2011 7
Exhibit 6: Key Assumptions
Particulars (%) FY11E FY12E
Order Inflow Growth - Power (5.0) (2.5)
Order Inflow Growth - Industry 15.0 10.0
Order Inflow Growth - Exports 10.0 5.0
Order Inflow Growth - Combined 0.5 1.3
Order Backlog Growth - Combined 12.1 6.0
Order Book Coverage
Order Book/Sales (x) 3.9 3.4
Order Book/Fwd Sales (x) 3.2 3.1
Order Book to Sales execution (%) 29.0 31.1
Source: Company, Angel Research
Exhibit 7: Angel EPS forecast
(`) Angel forecast Bloomberg consensus Var (%)
FY2011E 115.2 113.6 1.4
FY2012E 141.6 138.5 2.2
Source: Company, Angel Research
Exhibit 8: Premium/Discount to Sensex P/E
Source: Company, Angel Research
Exhibit 9: One year forward P/E
Source: Company, Angel Research
Exhibit 10: Comparative valuation
Company Reco. CMP Tgt. Price Upside P/BV(x) P/E(x) FY2010-12E RoCE (%) RoE (%)
(`) (`) (%) FY11E FY12E FY11E FY12E EPS CAGR FY11E FY12E FY11E FY12E
ABB* Neutral 742 - - 6.0 5.0 32.1 24.2 31.1 20.3 22.3 18.6 20.8
Areva T&D* Sell 309 260 - 7.6 6.4 42.3 29.4 14.6 13.9 18.0 18.6 22.7
BHEL Neutral 2,218 - - 5.5 4.4 19.2 15.7 26.8 33.1 32.1 31.3 30.4
BGR Energy Accum. 640 720 12.5 5.1 4.0 16.5 13.3 31.1 18.2 17.7 34.7 33.6
Crompton Greaves Buy 284 375 32.1 5.7 4.5 20.3 17.5 10.0 38.5 36.9 31.4 28.4
Jyoti Structures Buy 118 215 82.0 1.6 1.3 8.6 6.8 29.6 18.8 19.3 20.2 20.6
KEC International Buy 91 130 42.8 2.5 2.0 10.0 7.9 22.2 18.5 18.9 27.6 26.2
Thermax Neutral 705 - - 6.3 5.0 23.7 18.8 31.0 30.9 31.0 29.3 29.5
Source: Company, Angel Research.*Note: December year ending
(20)
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Absolute Premium 5-yr Average Premium
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BHEL | 3QFY2011 Result Update
January 21, 2011 8
Profit and Loss Statement
Y/E March (` cr) FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Net Sales 17,238 19,305 26,212 32,880 40,234 48,409
Other oper. income - - - - - -
Total operating income 17,238 19,305 26,212 32,880 40,234 48,409
% chg 28.9 12.0 35.8 25.4 22.4 20.3
Net Raw Materials 9,487 10,662 16,030 19,307 23,646 28,934
Other Mfg costs 2,181 2,754 3,555 2,854 3,219 3,994
Personnel 2,369 2,608 2,984 5,153 5,693 6,056
Other - - - - - -
Total Expenditure 14,038 16,024 22,569 27,315 32,558 38,983
EBITDA 3,200 3,281 3,643 5,566 7,676 9,425
% chg 40.2 2.5 11.1 52.8 37.9 22.8
(% of Net Sales) 18.6 17.0 13.9 16.9 19.1 19.5Depn. & Amort. 273 297 334 458 579 686
EBIT 2,927 2,984 3,309 5,108 7,097 8,739
% chg 43.7 1.9 10.9 54.4 38.9 23.1
(% of Net Sales) 17.0 15.5 12.6 15.5 17.6 18.1
Interest & Othercharges
43 35 31 34 35 35
Other Income 824 1,445 1,497 1,516 1,614 1,956
(% of PBT) 22.2 32.9 31.4 23.0 18.6 18.3
Others - - - - - -
Recurring PBT 3,707 4,393 4,776 6,591 8,676 10,660
% chg 46.9 18.5 8.7 38.0 31.6 22.9
Extraordinary Exp/(Inc.) (28.9) (37.4) (73.1) - - -
PBT (reported) 3,736 4,430 4,849 6,591 8,676 10,660
Tax 1,321.4 1,571.1 1,710.6 2,280.0 3,036.6 3,731.1
(% of PBT) 35.4 35.5 35.3 34.6 35.0 35.0
PAT (reported) 2,415 2,859 3,138 4,311 5,639 6,929
Add: Share of earningsof associate
- - - - - -
Less: Min. interest (MI) - - - - - -
Prior period items - - - - - -
PAT after MI (reported) 2,415 2,859 3,138 4,311 5,639 6,929
ADJ. PAT 2,414 2,860 3,126 4,311 5,639 6,929
% chg 44.1 18.5 9.3 37.9 30.8 22.9
(% of Net Sales) 14.0 14.8 11.9 13.1 14.0 14.3
Basic EPS (`) 98.6 58.4 63.9 88.1 115.2 141.6
Fully Diluted EPS (̀ ) 49.3 58.4 63.9 88.1 115.2 141.6
% chg 44.1 18.5 9.3 37.9 30.8 22.9
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BHEL | 3QFY2011 Result Update
January 21, 2011 9
Balance Sheet
Y/E March (` cr) FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
SOURCES OF FUNDS
Equity Share Capital 245 490 490 490 490 490
Preference Capital - - - - - -
Reserves& Surplus 8,544 10,285 12,449 15,426 19,633 25,016
Shareholders Funds 8,788 10,774 12,939 15,915 20,123 25,506
Minority Interest - - - - - -
Total Loans 89 95 149 128 128 128
Deferred Tax Liability (935) (1,338) (1,840) (1,527) (1,527) (1,527)
Total Liabilities 7,942 9,531 11,248 14,516 18,723 24,106
APPLICATION OF FUNDS
Gross Block 4,135 4,443 5,225 7,827 8,722 10,877Less: Acc. Depreciation 3,146 3,462 3,754 4,171 4,750 5,436
Net Block 989 981 1,470 3,656 3,971 5,440
Capital Work-in-Progress 303 658 1,157 289 895 239
Goodwill - - - - - -
Investments 8 8 52 80 80 80
Current Assets 20,980 27,906 36,901 42,933 51,332 60,293
Cash 5,809 8,386 10,315 9,788 12,830 14,670
Loans & Advances 1,141 1,388 2,424 2,814 3,219 3,873
Other 200 421 350 407 392 513
Current liabilities 14,337 20,022 28,333 32,442 37,554 41,946
Net Current Assets 6,643 7,884 8,568 10,491 13,778 18,346
Mis. Exp. not written off - - - - - -
Total Assets 7,942 9,531 11,248 14,516 18,723 24,106
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BHEL | 3QFY2011 Result Update
January 21, 2011 10
Cash Flow Statement
Y/E March (` cr) FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Profit before tax 3,736 4,430 4,849 6,591 8,676 10,660
Depreciation 273 297 334 458 579 686
(Inc)/Dec in Working Capital 1,043 1,336 1,244 (2,450) (244) (2,729)
Less: Other income 447 1,023 983 1,516 970 1,202
Direct taxes paid 1,484 1,974 2,213 2,280 3,037 3,731
Others 42 30 (18) (41) - -
Cash Flow from Operations 3,163 3,097 3,214 762 5,004 3,684
(Inc.)/Dec.in Fixed Assets (431) (664) (1,280) (1,734) (1,500) (1,500)
(Inc.)/Dec. in Investments - - (44) (27) - -
Other income 447 1,023 983 1,516 970 1,202
Cash Flow from Investing 16 359 (341) (245) (530) (298)
Issue of Equity - - - - - -Inc./(Dec.) in loans (469) 6 54 (22) - -
Dividend Paid (Incl. Tax) 692 873 974 1,334 1,432 1,546
Others (343) (11) (24) 313 - -
Cash Flow from Financing (1,161) (868) (919) (1,356) (1,432) (1,546)
Inc./(Dec.) in Cash 1,675 2,577 1,929 (527) 3,042 1,840
Opening Cash balances 4,134 5,809 8,386 10,315 9,788 12,830
Closing Cash balances 5,809 8,386 10,315 9,788 12,830 14,670
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BHEL | 3QFY2011 Result Update
January 21, 2011 11
Key Ratios
Y/E March FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Valuation Ratio (x)
P/E (on FDEPS) 45.0 38.0 34.7 25.2 19.2 15.7
P/CEPS 40.4 34.4 31.4 22.8 18.3 15.4
P/BV 12.4 10.1 8.4 6.8 5.5 4.4
Dividend yield (%) 1.1 0.7 0.8 1.1 1.1 1.2
EV/Sales 6.0 5.2 3.8 3.0 2.4 1.9
EV/EBITDA 28.7 27.1 23.7 17.8 11.5 9.2
EV/Total Assets 11.6 9.2 7.5 6.2 4.7 3.7
Per Share Data (`)
EPS (Basic) 98.6 58.4 63.9 88.1 115.2 141.6
EPS (fully diluted) 49.3 58.4 63.9 88.1 115.2 141.6
Cash EPS 54.9 64.5 70.7 97.4 121.3 143.9DPS 24.5 15.3 17.0 23.3 25.0 27.0
Book Value 179.5 220.1 264.3 325.1 405.3 503.7
Dupont Analysis
EBIT margin (%) 17.0 15.5 12.6 15.5 17.6 18.1
Tax retention ratio 0.6 0.6 0.6 0.7 0.7 0.7
Asset turnover (x) 5.1 7.0 10.1 7.4 6.0 5.3
ROIC (Post-tax) (%) 55.8 69.6 82.4 75.1 68.3 62.3
Cost of Debt (Post Tax) (%) 8.6 24.8 16.3 15.8 17.8 17.8
Leverage (x) (0.7) (0.8) (0.8) (0.6) (0.6) (0.6)
Operating RoE (%) 25.1 35.1 30.2 38.8 36.2 36.8
Returns (%)
RoCE (Pre-tax) 39.5 34.5 31.9 35.1 42.7 41.4
Angel RoIC (Pre-tax) 105.0 148.9 226.2 137.1 125.5 111.1
RoE 30.0 29.2 26.4 29.9 31.3 30.4
Turnover ratios (x)
Asset Turnover (Gross Block) 4.3 4.5 5.4 5.0 4.9 4.9
Inventory / Sales (days) 84 94 95 95 94 92
Receivables (days) 178 204 195 204 200 195
Payables (days) 66 75 72 74 72 71
W. cap. cycle (ex-cash) (days) 18 (9) (24) 8 8 19
Solvency ratios (x)
Net debt to equity (0.7) (0.8) (0.8) (0.6) (0.6) (0.6)
Net debt to EBITDA (1.6) (2.2) (2.5) (1.7) (1.5) (1.4)
Int. Coverage (EBIT / Int.) 76.2 96.2 124.5 152.5 221.2 271.2
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BHEL | 3QFY2011 Result Update
January 21 2011 12
Research Team Tel: 022 – 3935 7800 E-mail: [email protected] Website: www. angelbroking.com
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Disclosure of Interest Statement BHEL
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to 15%) Sell (< -15%)