Bharat Heavy Electricals Shares Fall As Q4 Earnings Disappoint

Bharat Heavy Electricals shares fell over 6 per cent on Monday after the power equipment-maker reported weak earnings for the March quarter. 

BHEL's net profit declined 59 per cent to Rs 360 crore in Q4 compared to Rs 880 crore in the corresponding quarter of last fiscal. BHEL's profit was also aided by other incomes of Rs 414 crore. 

Domestic brokerage Religare said BHEL's Q4 operating results were below the consensus estimates. 

BHEL's revenue declined 21 per cent to Rs 9,792 crore compared to Rs 12,368 crore in the year-ago quarter. 

BHEL's EBITDA (earnings before interest, taxes, depreciation and amortization) margin came in at 3.6 per cent, which was much lower than estimates of 7 per cent. Religare said BHEL's EBITDA margin was impacted by provisions of Rs 950 crore, which includes Rs 350 crore towards doubtful debts. 

The power equipment-maker received orders worth Rs 15,650 crore in the fourth quarter taking its total outstanding order book to Rs 1.1 lakh crore as of March 31, 2016. However, the company said that projects worth about Rs 50,000 crore are relatively stressed and hence are likely to move at a slower pace, which Religare said is a downside risk to its earnings estimates. 

Religare has a "sell" rating on BHEL with a target price of Rs 75. 

BHEL shares closed 5.78 per cent lower at Rs 120.7. It was the top loser among the Nifty50 stocks.