Bharat Heavy Electricals Limited (BHEL) has tanked over 7% to Rs 176 in noon deals on back of heavy volumes. The stock opened at Rs 189 and touched a low of Rs 175 on BSE. A combined 8.39 million shares have already changed hands on the counter so far against an average sub 3 million shares that were traded daily in past two weeks on BSE and NSE.
Meanwhile, analyst at HDFC Securities maintained “Sell” rating on the stock and reduce target price to Rs 147.
Analyst believe that for the foreseeable future, BHEL’s order inflows have peaked out in FY11 (Rs 60,000 crore) as India’s coal constraints will ensure cautious ordering from developers.
“Our assumption of Rs 96,000 crore inflows over FY14-16E factors in an optimistic case in our view. Margin pressure will also continue for a sustained period as increased competition and wage revision post FY17 take their toll,” analyst said in its report dated July 17, 2013.
Meanwhile, analyst at HDFC Securities maintained “Sell” rating on the stock and reduce target price to Rs 147.
Analyst believe that for the foreseeable future, BHEL’s order inflows have peaked out in FY11 (Rs 60,000 crore) as India’s coal constraints will ensure cautious ordering from developers.
“Our assumption of Rs 96,000 crore inflows over FY14-16E factors in an optimistic case in our view. Margin pressure will also continue for a sustained period as increased competition and wage revision post FY17 take their toll,” analyst said in its report dated July 17, 2013.
