BHEL Q4 results preview: Here's what brokerages expect from the PSU firm

State run Bharat Heavy Electricals Limited (BHEL) will announce its results for the period ended on March 31, 2023. The company is likely to report a mixed bag of numbers as analysts see growth in revenue but its profit and EBITDA may drop on the year-on-year (YoY) basis despite a rise in EBITDA margins.

According to the market participants, they see a strong rise in gross margins increasing over 500 basis points (bps). However, the earnings may rise on a quarter-on-quarter (QoQ) basis. Management's view on new orders, thermal power, Vande Bharat and margins will be the key points to follow.

ICICI Securities pegs BHEL's revenue at Rs 8,922.2 crore, up 10.7 per cent YoY and 6.1 per cent QoQ, with a gross margin of 34.7 per cent, expanding 555 bps sequentially. Its EBITDA is seen at Rs 1,281.2 crore, up 11 per cent YoY and QoQ, with an EBITDA margin of 3 per cent, rising 122 bps YoY and 765 per cent QoQ. Profit before tax is seen at Rs 696.5 crore, down 23.4 per cent YOY.

For BHEL, we expect EBITDA to improve on the back of right back of provisioning during the quarter. Commentary on the order inflow visibility, mainly Vande Bharat, thermal power; margin improvement and account receivable would be the key, said ICICI Securities, keeping BHEL among its top picks from the sector

Antique Stock Broking expects BHEL to report a revenue of Rs 9,146.2 crore, rising 13.5 per cent YoY and 73.8 per cent QoQ, with a EBITDA at Rs 1,424.6 crore, rising 23.7 per cent YoY. The company may report a PAT at Rs 128.3 crore, dropping 54.8 per cent YoY but rising 8.4 per cent QoQ.

Ahead of its results BHEL was dropped about 3 per cent to Rs 79.05 during the trading session on Friday. The stock has rallied about 60 per cent in the last one year, while it is flat in the year 2023 so far.

Prabhudas Lilladher sees revenue for BHEL at Rs 9,213.4 crore for the QFY23, up 14.3 per cent YoY, while its EBITDA is seen at Rs 355.3 crore, plunging 69.2 per cent YoY. The company may report PAT at Rs 210.3 crore, down 76.9 per cent on a yearly basis, but surging 578.3 per cent QoQ. The brokerage firm has a target price of Rs 36 on the stock with a 'sell' tag.

Revenue is expected to grow led by pickup in execution. Management commentary on execution pace, working capital situation, order pipeline, diversification into non-power segment, margins will be key monitorables. Q4FY22 numbers included reversal of provisions, resulting in higher PAT. EBITDA margins are seen at 3.9 per cent, which were 14.3 per cent a year ago.

Nuvama Institutional Equities sees revenue at 24,600 crore with a EBITDA margin of 3.1 per cent for the entire year FY23. EPS is seen at Rs 1.1 with a return on Equity at 1.5 per cent. The brokerage firm upgraded BHEL to ‘hold’ with a target price of Rs 80 in April 2023, anticipating a pickup in thermal orders over the next few years.

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