BHEL Slips 18% on Lower Than March Quarter Results

Bharat Heavy Electricals Limited (BHEL) shares have slipped 18 per cent to Rs 62.55 on the Bombay Stock Exchange in intra-day trade on Monday after the company reported a lower-than-expected set of numbers for the quarter ended March 2021 (Q4FY21).

In Q4FY21, BHEL reported a net loss of Rs 1,036 crore as against a loss of Rs 1,532 crore in the year-ago quarter. Revenues grew 42 per cent year-on-year (YoY) at Rs 7,171 crore on a low base, with some impact of execution headwinds and pandemic. EBITDA (earnings before interest, taxes, depreciation, and amortization) level loss came in at Rs 1,264.3 crore as against a loss of Rs 561.7 crore in Q4FY20 owing to lower-than-expected execution and higher-than-expected operating expenses.

“Overall, Q4FY21 appears to be muted as operating losses further widened despite some rebound in execution amid a low base. However, recent execution headwinds in the power segment due to various issues leading to project delays and working capital stress continues to be major near term challenges and needs to be resolved quickly to regain profitability amid pandemic,” ICICI Securities said in a note.

However, BHEL has initiated stringent measures on the cost control front to improve operational performance, working capital situation and focusing on new growth opportunities in oil and gas, transportation defense and aerospace for utilizing manufacturing facilities and to achieve diversification, the brokerage firm added.

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