BHEL Q3 results preview: Bharat Heavy Electrical Ltd (BHEL) is set to announce its results for the period ended on December 31, 2024 later today. Analysts tracking the state-run capital goods player are expecting it to report a strong set of numbers on the back order inflows and solid execution by the company.
The brokerage firms are expecting strong growth in revenue and net profit on both year-on-year (YoY) and quarter-on-quarter (QoQ) basis, with some skepticism on the magnitude of margin expansion, where some factor in a 200 basis points (bps) growth. Management commentary on the order book, execution and sectors shall be the key thing to watch out.
Kotak Institutional Equities pegs net sales of BHEL to come in at Rs 6,785.9 crore, up 23.3 per cent YoY and 3.1 per cent QoQ. Ebitda is likely to come in at Rs 423.2 crore, up 95.4 per cent YoY and 53.9 per cent QoQ, with Ebitda margins expanding over 200 bps to 6.2 per cent. Net profit is likely to come in at Rs 1,89.3 crore, surging 62.3 per cent YoY and 95.8 per cent QoQ.
"We expect 23 per cent YoY improvement in revenues, driven by the power and industrial segments. We expect Ebitda margin to improve 200 bps sequentially over operating leverage, while gross margin remains flat QoQ," Kotak said, which has a 'sell' rating with a target price of Rs 110 apiece.
Shares of BHEL dropped more than 2 per cent to Rs 190 on Tuesday, with its total market capitalization slipping below Rs 66,500 crore mark. The stock had settled at Rs 194.35 in the previous trading session of Monday. It has tumbled more than 43 per cent from its 52-week high at Rs 335.40 hit in July 2024.
JM Financial pencils net sales of BHEL to come in at Rs 6,617.5 crore, up 25 per cent YoY and flat on a sequential basis in December 2024 quarter. Ebitda is likely to come in at Rs 304.2 crore, up 40 per cent YoY and 11 per cent QoQ, with Ebitda margins improving 40 bps to 4.6 per cent. PAT is likely to come in at Rs 145 crore, up 140 per cent YoY and 37 per cent QoQ.
"BHEL is expected to report good performance driven by healthy order-book, pick-up in execution and operating leverage, with improvement in sales. We also see improvement in Ebitda due to operating leverage & better orders’ mix," said JM Financial with a 'buy' rating on the stock.
Antique Stock Broking sees BHEL to clock sales of Rs 6,997.9 crore, rising 27 per cent YoY and 6 per cent QoQ. Ebitda is seen at Rs 349.9 crore, up 62 per cent YoY and 27 per cent QoQ. PAT may come in at Rs 158 crore, zooming 241 per cent YoY and 63 per cent QoQ. Antique has a 'buy' rating on BHEL with a target price of Rs 364, adding it to the top picks from the industrial sector.