Dalal Street Investment Journal – July 20, 2019

12 DALAL STREET INVESTMENT JOURNAL I JULY 22 - AUG 4, 2019 DSIJ. in^

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Monthly Stock Market Returns

BSE Code: 500103

CMP: `64.65 FV: ` 2

BSE Volume: 497,

Date: 16 /07/

DS

B

harat Heavy Electricals Ltd.
(BHEL) is engaged in the
designing, engineering,
construction, testing,
commissioning and servicing
of a range of products catering to the core
sectors operating in the Indian economy.

On the standalone financial front, the
company's total income from operations
rose 1.48 per cent to 10,297.16 crore in Q4FY19 from10,146.95 crore in
Q4FY18. EBITDA climbed 13.29 per
cent to 1,395.23 crore in Q4FY19 from 1,231.60 crore in Q4FY18. EBITDA
margin rose to 13.55 per cent in Q4FY
from 12.14 per cent in Q4FY18. Net
profit increased 49.33 per cent to
682.70 crore in Q4FY19 from457.
crore in Q4FY18. Net profit margin
reached 6.63 per cent in Q4FY19 from
4.51 per cent in Q4FY18. EPS soared
50.40 per cent to 1.88 in Q4FY19 from 1.25 in Q4FY18.

On the consolidated financial front, total
income from operations increased 4.
per cent YoY to 30,367.65 crore in FY from29,075.46 crore in FY18. EBITDA
increased 8.52 per cent to `2,137.93 crore

BUILD A FOUNDATION FOR STEADY RETURNS

Bharat Heavy Electricals Ltd.

Declining raw material costs and

improving operating leverage helped

improve EBITDA margins. Lower

depreciation and taxes resulted in

improved profitability. The company is

also focusing on ramping up its

execution to bolster margin growth. The

cost-cutting measures implemented by

the company helped the company gain

market share.

BHEL and Container Corporation of

India Ltd. (CCIL) have entered into an

agreement to form a Joint Working

Group (JWG) called BHELCON, for

jointly setting up a rail-based logistics

terminal at Haridwar. In doing so, BHEL

will gain a strategic entry into the area of

logistics.

The order inflows stood at `6,630 crore in

Q4FY19 and `23,900 crore in FY19,

down by 41 per cent YoY. Of these,

`2,600 crore worth of orders are in the

industrial business, while the remaining

`3,900 crore worth of orders were in the

power business. The general elections

delayed the award of tenders for the

company. Nonetheless, BHEL has won all

the BTG/EPC order for thermal power

plant over the past couple of years. It

holds L1 position in orders worth `25,

crore predominantly from the power

sector. The company has signed MoU for

revenues of `33,000 crore for FY20. Thus,

there is good earnings growth visibility in

the near term.

The company’s strategy is to diversify

orders to the non-coal business, adopt

superior technology to ensure emission

control systems are in place and increase

the rate of execution. By virtue of these

factors, we urge our reader-investors to

BUY this stock.

in FY19 from `1,970.11 crore in FY18.

EBITDA margin surged to 7.04 per cent in

FY19 from 6.78 per cent in FY18. Net

profit climbed 44.13 per cent to

`1,194.76 crore in FY19 from `828.

crore in FY18. Net profit margin increased

to 3.93 per cent in FY19 from 2.85 per

cent in FY18. EPS grew 133.61 per cent to

`2.78 in FY19 from `1.19 in FY18.

Power revenue dropped 3 per cent YoY to

`8,100 crore in Q4FY19. However, the

company's industrial business revenue

rose 14 per cent YoY to `1,700 crore.

PRICED SCRIP

Total Income 10297.16 7336.42 6779.88 5935.49 10146.

Other Income 120.87 226.48 151.67 178.61 197.

Operating Profit 1516.10 445.20 392.45 465.85 1429.

Interest 96.44 57.70 68.88 63.90 72.

Net Profit 682.70 191.95 185.17 155.58 457.

Equity 696.41 734.28 734.28 734.28 734.

Last Five Quarters (`/Cr)

Particulars Mar-19 Dec-18 Sep-18 Jun-18 Mar-

National Fert. 61.30 78.00 27.24 350.

Gufic BioSci. 78.70 95.10 20.84 288.

Jamna Auto Ind. 77.15 96.75 25.41 254.

Virinchi 88.00 110.00 25.00 225.

Amines & Plasti. 68.00 81.00 19.12 167.

Name of

Company

Absolute

Gains

(%)

Best of LAST ONE Year

Reco

Price

(`)

HERE IS WHY

Rising market share

Healthy operating performance

Prudent management

Exit/CMP

Price (`)

Annual

Returns

(%)

Shareholding Pattern

as of Mar. 2019

Promoters 63.

Public 36.

Others --

Total 100

Note: The stocks recommended under this section are fundamentally strong stocks. However investors are advised to wait for the correct opportunity

to enter these stocks considering the market sentiment right now.

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